If I pay cash I won't have access to the downpayment $$$ for the next property that I want to purchase, so I would NEED the HELOC.

We may not have enough to just add stair but need to open the wall to make space. and any good contractor you would recommend ?

If that is the case a home equity line of credit may be a easier and cheaper option that will allow you access to those funds and greater flexibility.

On the other hand, they are growing fast, and I'd love to provide a place for them with an actual yard and space to play. 

@Tom HermanUsually not a good idea.You'll lose the capital gains exemption.You'll only have access to hard money or commercial lenders.You would need to speak with an accountant and get a serious opinion on it to see if it makes sense...

They partner with me because of the experience I bring to the table, and the access to off market deals.  

For others, it is high risk because they do not know the space.

It gives me a bit more confidence that the largest investor (>50% of the equity) is very experienced in the space and has been active over many cycles.

haha  That's really not my issue; I just wouldn't want to deal with the logistics of scheduling cleanings/turnarounds and coordinating appropriate check-in/out times for a few extra bucks, regardless of the way in which the space was used.  

Just wanted to let you know I’ll need the driveway left accessible for myself or my tenants in the future.