I agree with both of you regarding the importance of screening for a LT tenant.What are your thoughts regarding any advantages/disadvantages of having it geared more toward short-term rentals (town allows), so that we don’t have a permanent resident on the property? 

You should be paying interest on the funds as they're being usedAfter the rehab is done, your lender should be able to do a permanent refi to pay off the construction loan and potentially recoup your downpayment amount (credit unions/local banks would be the best for this since they can be more flexible with cashing out)

At some point in there, you may be able to refinance into a permanently lower rate.

There are many investors in this forum, including myself, who are successfully using overfunded permanent life insurances in our investment flow.

This could be a permanent partner in the business or have a limited term with payout to exit. 

It doesn't so much matter from a tax perspective, but you run the risk of the tenant making a future claim that you permanently lowered his rent.

However, in a captured market serving a refinery, you have to be aware of the risk if the plant shuts down for an extended time or permanently like some have done recently. 

Short term it will certainly create a shelter crisis as many people will loose their homes temporarily or permanently and they will need a place to sleep.

When I signed my second homeRider, I did It through a construction to perm loan on the front end, meaning I signed all closing documents before the build even started and when it’s done It will just convert to a permanent mortgage without having to refi.

You want to get permanent financing in place so you don’t have the HELOC out too long.