There are far too many regulations, the transaction is a much longer process, and we are talking about someone's biggest purchase.

A good property manager can help with tenant screening, enforce lease terms, and handle evictions more efficiently if it comes to that.Require a Larger Security Deposit: Within the bounds of local regulations, a larger deposit can provide a cushion in case of damage or unpaid rent.Consider Rent Guarantee Insurance: Some companies offer insurance products that can cover lost rent in case of tenant default.

This is related to lending laws/regulations created by the Dodd-Frank Act in 2010.

If you control how they perform tasks, set their hours, or provide tools, they should likely be a W-2 employee, requiring you to withhold taxes and comply with payroll regulations.

SignaturesThis Agreement is binding upon the parties and their successors.Contractor Signature:[Printed Name] [Date]Subcontractor Signature:[Printed Name] [Date]AttachmentsScope of Work document.Project drawings/plans.Proof of insurance and licenses.Payment schedule.Note: This template is for informational purposes only and should be reviewed by a legal professional to ensure compliance with local laws and regulations.

The primary risks at this point would be       1) to your lender, the risk of a margin call.       2) To you; underestimating the true cost of a project and cost overruns      3) To you; legal risk of securities regulations if you partner looses money. 

That could mean fewer lending regulations overall, which would be amazing.

However, consider STR seasonality, local regulations, and management demands, and ensure your equity loan and new primary residence costs fit comfortably within your budget.

There waiving regulations that would have impeded it, and are trying to get additional funding to cover anyone who had any lack of coverage. 

They may be regulated, they maybe aren't.A Credit Union is a good choice for funding.