Conventional Loan first or Personal Loan (Promissory Note) first?

[Aaron Motacek]

Hi everyone,

I'm sure I could figure this out on my own, which I'll start trying to do now, but it's somewhat a matter of urgency so I'm posting here in the meantime.

I'm looking at possibly being able to get into two rental real estate properties (nicer, somewhat newer SFHs or twin homes ~$200k each... aka not fixer-uppers), with one becoming my primary residence (house hack), because of recently available financing opportunities (one being a family member who is selling a business soon and will have a lot of "extra cash" and is looking into investment opportunities).

Because of this, I've had the idea to "purchase" two properties, one being via a conventional loan if I can get approved (my primary residence property most likely, for best interest rates, etc.), and the other being through Seller Financing (my family member purchasing the property, then either doing a (1) promissory note / note & mortgage, (2) contract for deed, or (3) lease option to me).

A few questions:

1. This is likely dependent on which of the Seller Financing options was being utilized, but does it make sense to try to get the conventional loan FIRST, then do the Seller Financing option, rather than the other way around? (Aka, would having Seller Financing in place potentially hurt my ability to get approved for a conventional loan, via increased DTI for example?)
2. While my family member would have the ability to pay "all cash" for the property, does it make sense for them to look into to look into financing it as well, and THEN doing Seller Financing to me?
   1. Looking into this, the simple answer seems to be no, and that they should own the property outright.
3. Best choice out of the three Seller Financing options I mentioned?  (Any other Seller Financing options I didn't mention?)

Thank you for your help.

P.S.  I'm also going to be making this proposal to my family member soon, so let me know of any benefits to make sure I include while telling them!  (Yes, I'm new into real estate investing, but have learned a lot and am ready to start getting my feet wet!)