Since you will be renting it out you should get a conventional loan.

No, it was secured but apparently he used the same collateral for every loan he took out. 

A relative who does long-distance real estate investing told me that I have to sign the final loan document and the transfer of ownership document in person.

Personally, I love them because they offer built-in diversification.In my experience, local banks are your best bet for financing mixed-use properties.

Personal guarantees are EXTREMELY common.

CORRECTION from above statement(s): Many Lenders will NOT require you to be a Personal Guarantor of a loan your partner gets.

You have a bigger loan, but not a bigger tax basis.

The property is insured on your behalf, personally. 

Would a HELOC or home equity loan on my personal home be a good idea to fund this?  

Many real estate investors opt for a fix-and-flip loan because they’re relatively easy to obtain: no personal income verification (no DTI requirements), and you can often borrow up to 90% of the purchase price and 100% of the rehab costs.