It's certainly the easiest way to build equity when you are just starting out.In King county, you can forget about 1% rule, if you find .5% you'll be in great shape.

It would provide $100K equity for the risk (I always overrun my rehab budget in terms of both cost and time) and effort without any selling costs, selling taxes, etc.   

Two ways to get at that equity, borrow it or sell it.

We plan on having 4 units cash flowing and once paid off in 5 yrs we will use property equity to complete the remaining unit.

In terms of "best" measure of return my favorite is equity multiple as its very simple and straight forward. 

basic sub too.. deal as long as your personally well capitalized. this scenario probably works.its the undercapitalized buyer and the sterling credit seller that creates a huge risk for a seller and I don't recommend any seller to participate in that type of deal.but since the sellers credit is already bad there is real equity in the deal that will keep you in the deal and you sound like you have the wherewhithal to pull it off..

forcing equity or renting?

I'm investing across different states in a mix of debt/equity deals.

Thus, any rents you collect will have a positive cash flow which would only get better over time since you live in a pretty stable market.

I'm thinking this is a convenient way for the CU to limit their exposure, at my equity expense!