They are going to allow them to charge consumers an negative rate because that could generate a run on banks and result in people storing cash.

You can seller finance to another investor as a commercial loan, but you're speaking about consumer financing.As I said, read here on BP, there are a few, not many, who know seller financing as it is required to be done today so be careful about what you read on line.

Renting is the most time consuming aspect of property management.I have talked to local applicants that have bad experiences with property management companies.

Laws related to consumer protection are mostly local, where it hasn't been addressed by a federal statute.

Water/ sewer/ garbage is about the same cost for a 500 square foot unit as it is for a 3,500 square foot house, so utilities become a bigger percentage of total rent and costs with smaller units.Collecting rent is time consuming.

A rise in the fed funds rate causes a rise in the prime rate as well, which negatively affects the ability of all businesses and consumers to obtain credit at a low rate. 

That would open the wall in the kitchen to enable another cabinet but it would at least make the living area seem less consumed by the fireplace and would make it more modern looking which would make your appraisal come out a little better when you refi and would help you get better tenants because it would look more attractive.

So in other words all the hard and time consuming tasks are already done and the property is cash flowing from day one".It is very important you do not just invest on faith, learn the area, the team you intend on working with, really drilling down if the boutique supplier is offering you value for your strategy.

I hope it's not too late to invoke the partner aspect, it allows you to be a lot more demanding in terms of your due diligence, and it allows you to not be the bad guy if you have to turn them down ("I wish I could have helped you but my partner said no and we can't invest any of our money unless we both approve the investment").To your original question, IF you decided to make a loan like this, I would see three options:Unsecured personal loan (weakest/worst/don't do it option)Secured loan - they buy property and you are the lender secured by a mortgage on property (better)Rent-to-own - you buy property and they rent from you with an option to buy (questionable esp w/ family, may be tricky or illegal depending on how structured, etc. and see next point re: owner-occupied)However another aspect is that since this would be an owner-occupied property, there are a ton of consumer protection laws (Dodd-Frank) that apply.

Yes as you mentioned corporations will benefit from lower rates and try to increase market share, but they are less influenced by this since their cost of borrowing is less than that of a consumer.