I told the couple that I got an offer for $1,700 but wanted to ultimately rent to them but need the income.

The goal here would be to increase rental income.

Speak to lenders, have a nice package together: they will want an SREO, your background, your assets/ income etc, they will want your "business plan", your underwriting, your capex breakdown line by line. 

I’d suggest focusing on securing solid DSCR loans—like those from thelender.com, which lends up to 80% LTV, considers STR income, and operates as a direct lender.

If the properties are split into more than one LLC, then each LLC will need its own accounts.Checking: collect all income here, then use it to pay bills.

@Brittney Yang first red flag is it doesn’t sound like he’s that interested in long term holds but the primary reason for partnership is expertise in renovation and secondary reason is balance sheet and income to help get financing.Regarding reason one, I would offer to compensate him for his time in assisting you and have a very clear scope of what that responsibility is.  

Typically 75% of rental income can be applied towards your DTI for qualification. 

The liability coverage is way better, the building coverage is often better, and commercial policies typically cover loss of business income as well, which a homeowners policy isn't going to help you with.California + wildfire area + STR is super tough. 

My plan is to funnel the rental incomes from all three properties, along with my W2 income, back into the HELOC while covering all expenses from it as well.

Financial freedom isn't simply about replacing your current income, because inflation continuously drives up prices, making a fixed income insufficient to maintain your standard of living.