With any kind of long term investment (especially real estate) TIME is huge force.

Is this a common theme?

this will yield a bunch of random markets all over the countrywhy not pick a market where you have some kind of advantage and focus all your energy on that? 

If you have a handshake/wink-wink kind of deal then you should get a Promissory note at least that outlines the terms of the loan and what happens if it default, who the loan is between, and usually in agreements like this the language is broad. 

So, to get funding, you probably need some kind of asset based lending where the lending is focus on the value of the asset and the ability of the asset to generate income. 

Sponsor has executed this strategy multiple times, management company specialize in this kind of asset-Does the Asset support the business plan?

But an equity position is not recommended unless they own the dirt or bring some other kind of value. 

I am planning to convert the living room in the property to bedrooms and want to use the garage as common space (have a pool table or a Foosball table, a couch etc).

Another common challenge is the tenant quality.

What kind of exclusives in the area does the current tenant have?