This would not be an issue if your mutual obligations had been clearly defined.

I.e. even though you need to submit draws for any rehab funds, you will get charged interest on the full amount each month.  

You take a HELOC for your primary renovations at 7%, invest the funds from option 1 to cover the payments of the HELOC.

(I guess that's what the $3K to $4K deposit is for)(3) Is it difficult to find private money @ 12% over 5 years to fund these deals?

Purchase price: $520,000 Raised 100% of the funds to buy this property.

If you're financially stable, have an emergency fund, and have a buy [box] get into the trending C class neighborhoods and buy value.

To navigate this, consider options like keeping your current home as your primary residence while house hacking a multi-unit property, using the HELOC funds strategically before moving, or exploring alternatives like a bridge loan or cash-out refinance.

From a credit perspective, house hacking also helps you build strong cash flow, which can make it easier to secure financing for future deals.Additionally, if you're targeting high-appreciation markets, you could also look into cash-out refinancing down the line to pull equity and fund additional investments.

We wanted a better DTI.Then we slapped a large heloc on it as an opportunity fund right before my wife quit her job for good.I would save the cash. 

Investing in a per deal syndicate is different than a fund.