No, it's not a normal business practice and does not pass the smell test.From driving? 

It's shifting to a model of a big anchor, a Target or a Costco, and lots of little businesses in that same shopping center. 

And that depends on how you view the costs. 

When you say "we," are you speaking about your business or your personal tax returns, or does your business flow into your personal returns because you file as a sole proprietor?  

For example, it is not unusual for me and my business partner to buy 4-unit buildings for about $250k and be able to rent them out for $4,000+/mo. 

To simplify the scenario I'm envisioning let me put it this way: what does a BRRRR look like when one of the parties contributing to the down payment and rehab costs ultimately ends up being the renter as well?

I would definitely factor in some substantial capex/ maintenance and repair costs which could lower your returns.  

While the borrowing costs are higher, I’m exploring strategies where the returns could offset this.

Over the years I have found that relying on the integrity of a tenant is often a costly error on my part.

Agents are also advising you to look for expensive mistakes (like checking the sewer which could cost 5-40k) and using their network and contacts to find homes off market or FSBO.