Dealing with that on a local level where you have eyes on the project and the ability to deal with issues early and if needed legally is 100 times easier than doing it long distance. 

Also  beware that  paying a large loan fee  may affect the lenders  ability to do the loan.

If you have a large down payment (or the ability to cover negative cashflow), the East Bay's appreciation and principal pay-down benefits have been historically very strong compared to other markets.  

Will your partner be upset because you are getting the better end of the deal living rent free(assuming you aren't paying rent).What if only your name is on the mortgage and deed, then the tax documents will all fall on you and your tax return and not his which makes it more complicated trying to shift income to him.If there are two people on the mortgage, it will impact both your DTI ratio's equally in full hurting both of your abilities to get credit in the future until the property is sold.Why can't you do the live in flip on your own?

Some lenders may be willing to modify the loan terms to allow the transfer without invoking the due on sale clause, especially if it does not affect the loan's security or your ability to repay the loan.

I would love to hop on a call with you to discuss lending options for your future projects, because financing your properties to the best of your ability will greatly benefit the profit of your projects.

They'll take a loan app, pull credit, verify income, and verify the ability to repay.

They have the ability to create projections for any property you have an interest in.

It may limit the amount of lenders ability to help you find the product.

You'll have to find an answer based on zoning, demand, and your ability to control the appearance of the additional improvements - you don't want to create a junk yard behind your triplex!