It is not a problem.There are different remedies, including soaker hoses and other remediation items, to limit soil impaction, but piers and leveling are common. 

They offered a 20 % interest premium and 5 % profit sharing (i know too good to be true and there is something wrong).

The primary variables are depth, soil structure and the need for shoring, rock interference  and setback/travel distance.

We learn when things go wrong. 

As an added bonus tenants like to complain about what is wrong with a property, and sometimes the landlord doesn't know about the things they mention especially if they are long distance and have a PM.

Your gut is telling you that there is something wrong with what they are selling.

There is much more nuance to investing than just HELOC vs cashout and I think investors miss a lot of the finer details and often select the wrong tool for their objectives. 

I could be wrong, though.

Some friends and family are interested in buying in to the right deal, but I don't understand how they get paid (wrong specialty I guess).

Get this wrong at your peril.