@Rene Ochoa Conventional loans will go to 75% max for cash out on investment properties.  

I don't like the terms and would try to avoid.We could still do a conventional loan and if I'm not mistaken it'd be this whole "gift money" thing so the shared ownership wouldn't be recognized legally.

We're both on board with the idea now - my question is around how to make the purchase and structure the agreement...we both want to go in 50/50 towards a conventional loan and then have it managed by a property manager. 

The only advantage is has over conventional loans is the 0% DP and no mortgage insurance. 

6.5% is def. super good number as it's below conventional.

Alternative way could be purchasing this property with normal conventional rehab loan, which is a standard 30 year fixed loan + rehab funds being funded up to 95% LTV.

We had bought the condo with a conventional mortgage in our individual names.

This is a conventional loan so my understanding was that I could request the removal of PMI once I got to 75% LTV (as opposed to 80% with a primary residence) as this was the case with the other properties.

If you add 2 ADUs traditional conventional F/F is typically not available but in this case the 2 units makes 5 unit.  5 unit s commercial MF with different rules and means to value.

If you have the income to support DTI requirements, Conventional investment products will provide the best deals.