Additionally, as a co-owner, he would directly benefit from any appreciation, tax deductions, and profits from the property.On the downside, being on the loan could impact his credit score, especially if there are any missed payments or financial issues.

Down side, your 2nd usage of a VA mortgage will run you 3.3% on the VA Funding fee (but it is financed into the loan), unless you get any disability from VA. 

Really your downside is that you have an investment property with a better rate and terms than you would have just buying it as a rental.

Downside is setting the “ sale” price such that the original investors get fair value and NewCo investors aren’t getting a bad deal.  

There will be PPP, so that is the downside.  

Downside is possible foreclosure but upside is having interest/control over more real estate at pennies on the dollar(55-65% of ARV).

Seems to me there is only upside for them but no share in any downside if the unit is not leased to short term stay occupants.

@Jade Frank I agree with what @Dominic Mazzarella and others are saying here, but If you find the downside outweighs the gain and you ultimately decide to sell the property, Since the property was held for investment use it would qualify for a 1031 exchange. 

The only downside with SC is the LTR pricing will be rough if you have to change course, so buy with that in mind.

You may not make as big of a return, but the downside is a lot less.