I would flip the script and argue under those circumstances the client is serving as the bank for the contractor and not the way you presented it.

But I'll play along...   

Hey BP, I am currently playing my last year of baseball at the University of Memphis.

Sure the million dollar suburbs are nice if you have that kind of money and are playing the larger appreciation game but dollar for dollar pound for pound when it comes down to rent to value ratio its difficult to find the same kind of cash on cash returns section 8 rental properties offer in Detroit.

I'm trying to wrap my head around working with investment capital long term, and there's also the potential for some seller financing from the building owners, and my cousin is on the board of a bank which could also come into play.

Having two solid paid off investments is more than enough, and I'd argue that it is even a better play for most people than continuing to scale and scale for the sake of scaling.  

In your situation the OA is going to play a more substantial role because you have a partner.

I'd be interested to hear how you approach evaluating a borrower’s past performance and how that plays into your final lending decision.

You are WAY too eager to leave your job for investing when investing takes years to deliver a return comparable to your job unless you have a bank vault of money to play with.

In your situation, it sounds like the primary focus for you is more a quality of life play (reducing your commute time), and the STR may allow you to break even cash flow wise?