HELOCs are much tricker than a closed end second - they don't typically allow you to close in an LLC and they are full doc qualification, meaning your FICO, employment history, income, DTI etc all come into play.

If they don't have assets or well paid employment, I would consider the offer of the payment plan.

Solid employment history.  

I use the 3x rent for my first barometer, steady employment, good credit, and of course 3 years of rental history.

But if employing your family works for you and for them - great, go ahead.

I'd have them sign my own lease on renewal and I'd make sure I had enough information on them so I can go after them if a legal issue arises such as employer and other similar data. 

For example: A small town has a large employer close down.

As far as waiting until you graduate: either option would work but I would imagine your biggest obstacle at the moment would be that you do not have a set record of wages from an employer.

The great thing about living in a high cost of living area is that your salary / wages are hopefully also very high.If you are a new college grad, I would focus the next 1-3 years on increasing your salary as much as possible(gain new skills, new certifications, change employers, etc).Once you make more money, you can easily get in a position to buy a property on a more frequent basis.Best of luck!

As I mentioned in my previous responses to this thread, I am employed by LoanGuys as a customer service representative.