A HELOC carries a higher rate over a shorter amortization usually 10 or 15 years and a mortgage carries a lower rate over a 30 year amortization offering a lower payment.You have to run the math in each scenario because the math differs based on a few things like Fico score, CLTV, Loan size, and time frame between purchase and refinance of new property.

A second option is getting a DSCR loan.Lastly, knowingly leaving deductions off of your tax return to qualify for a loan is mortgage fraud. 

Anticipation of these cuts initially moved mortgage rates downwards to their lowest in nearly 20 months.

A 3 bedroom house with two roommates would bring in around $1,400/month, and a home in the high $200k's with 3-5% down would have a mortgage pmt around $2k/month.

I would pay off the remaining 416K by getting a mortgage and hopefully have about 100K in equity.Anyone have thoughts or holes in this idea?

I've crunched the numbers on a typical 300-400K mortgage and the "break even" on refinance costs and rising rents is about 12-years. 

IMO, there are better and cheaper ways to do it.

A "pre-approval" sounds like a "consumer" mortgage rather than a commercial loan for investment real estate, is that correct?

Then of course, you are also hoping for appreciation.While it is attractive to not have to worry about cap-ex for a few years, many maintenance issues are usualy tenant-caused, so there may still be ongoing issues & expenses needing attention.Another option may be to buy an existing cheaper property, that's still in overall good shape.

For residential mortgage, an LLC needs two years of its own tax returns or occasionally, a local credit union where you have an account will ok it.The bigger question is about your partnership.