The cash flow borrowing full cost via heloc will be marginal, possibly even negative if using realistic expense estimates (I.e. something near the 50% rule).  

Is there an issue with getting set up with one or more of the credit bureaus and starting to report on our borrowers?

Fannie does have a guideline that allows a property to be deeded over to an entity so long as the original borrower is also in the entity, but you have to wait 6 months of seasoning and maintain continuity of ownership.  

Some borrowers are ok with this, some aren't so important to find that out at the beginning if that matters to you. 

Presumably the borrower is unable to refinance at current rates.The borrower may or may not be making payments on the note, even though it is past maturity (is it a problem to foreclose if they are making payments?)

Lending is tough, you need to know the market you're lending in, usually you want to have an understanding of credit-risk and be able to pull credit and run background to get a better read on your borrower.

It takes the right borrower and the right project. 

Don’t waste time with buyers/sellers/borrowers that won’t give you an EXCLUSIVE; if you do you’re competing with every other financial intermediary or broker and even if you’re successful probably won’t get paid4.

I'd start by talking to a bank about loans if you're DTI is already high-ie how much can you borrow? 

In that case you would be buying the house subject to that existing mortgage and borrowing an additional $100k?