Your $80K HELOC can serve as the down payment, as most lenders require 20%-25% of total project costs upfront.

All the leads I've found so far have balked at either the "investment property" requirement, the "in California" requirement (or both!)

.: I haven't passed this past legal review so for what its worth: Part of my standard requirements for everyone include income is at least 3X rent, minimum credit score, say 640, Clean record and no evictions as well as deposit is paid in full at signing of lease and 1st month rent is paid in full prior to handing over the keys.

Sure it may require some touch-ups here and there when you're done, but for the most part it turns out to be nicer in the end.

Are you looking at properties that only need "cosmetic" rehab or are you open to deals that require more rehab?

Simply gifting him half the property now wouldn’t immediately allow him to claim the exclusion without fulfilling this residency requirement, I don't believe.One thought would be to use a HELOC to pull just enough equity out of the current home and use it to buy a smaller home, or at least the down payment.

We also have investor loans that only require 5% down on new construction investment properties.

It also has a dashboard where you can see how far along you are with meeting the 750 hours requirement with at least 500 hours in material participation and 250 hours in general participation.

It would require being a process. 

Low Down Payment OptionsGerman lenders often offer financing programs requiring only 5-10% down payments, particularly for primary residences.Strong financial regulations in Germany support these low down payment options.3.