I believe Alexandria city allows it but portions of Fairfax county do not allow it. i would go option 1 personally. 

Would the person who takes on more labor to repair the property have greater preferred equity or is this usually treated differently?

I had a “lender” tell me he’d give me a personal loan with a fixed 4% rate on a 30 year term at whatever amount I wanted because he would like to “build a relationship” with me. 

So I don’t have to reinvent the wheel every time I hire a new person.

Appreciate if any personal experience can be shared that triggered the need.Thanks

While I don’t yet have personal experience with a HELOC, I’ve thought about this one for my self many times.

It sounds like you've done a great job in investing in yourself and taking personal risks. 

Since then, I've documented the process as a Boutique Hotel investor and have a deep commitment to sharing my knowledge around Boutique Hotel Investing with others who are looking for a path to financial freedom, and Boutique Hotels is the best path to get there in my personal opinion.

It can be price or unique amenity or your personal charm! 

Personally I’d do a 1031 to save $40k, I’d skip the LLC, increase the limit on my umbrella, and call it a day.