And don't forget to also factor in your investment goals, cashflow needs, and exit strategy.

@Brian KemplerI haven't had a lender reject a lease due to this specifically, but the tenant purchase option would be an exit option. 

Any recommendations on next steps if we were seeking to exit the relationship?

Then you own 30% of monthly cashflow and 30% of equity upon exit.$50k your investment$250k - their construction loan$300k all in$400k retail valueCurrent proforma estimates:Rent: $2690/mo (30% of it to me)Thoughts on this?

If the exit is a DSCR refinance, you will be capped at 75% LTV based on your experience level. 

What are you planning on doing with the property, your exit strategy> Would it be to refi or sell? 

Nowadays everyone has exited the arbitrage business model in my area simply because the supply vs demand is driving the revenue below profit benchmark for almost everyone.

I always like to have multiple exit strategies.

They can always pool money with others (arrange an exit plan in advance) and buy a house, or house hack.

If you are going to be active, and have high conviction in a project with a clearly defined entry/exit strategy then using a HELOC is one of the better sources of capital.But, I continue to have my stance that, on average, folks who use a HELOC to fund the down payment for long-term investments will eventually find themselves in a situation where their portfolios drain their personal financial situations, rather than fueling them.