You can househack non-conventionally, but that's by renting the room out and the better way.

Why don't you just non-renew him at the end of the term?

its funny how this changes with time and the market on BP  if you asked this question 5 to 7 years ago you get drowned out with the cash flow is the ONLY thing and appreciation is for gamblers my self I have always been about making appreciation games in RE.. by either value add building a new product or buying foreclosure and flipping or lending money and getting instant 12% plus returns . 

Strong rental performance & return Lessons learned?

If using a lender this is a non issue.

Not crazy, but if that mortgage becomes $650K, $700K, $800K, you begin to feel a little apprehensive and need more interest in return for incrementally higher risk. 

In return he will place the down payment, closing costs and IO payments during the HML.If the property is initially purchased by one LLC (Ours) and there is an active loan on the property, is it possible to register half of the property under the name of the investor's LLC as part of our model?

If there is an opportunity out there that you believe will provide you with better returns than what the stock market then yes buy real estate.

@Erlson Neba Much less stress and headaches than rentals especially for lower end areas where the ongoing maintenance will most likely diminish any return you may hope to make and where appreciation cannot be expected.

Depending on how bad the conditions are, accrued pref may never be paid out and original contribution may not be returned in full.If pref equity's original capital contribution is not returned in full, common equity is in even worse shape.