Set a budget, determine what you can afford (not what a mortgage broker says you can afford).Do your best to figure out insurance and taxes, and try to set aside 5% for maintenance each month for big ticket repairs that WILL happen.   

Be prepared for maintenance and repairs, as well as dealing with tenant issues and potential vacancies.

If the balanced is refinanced into a conventional loan there would need to be enough value in the property to meet the lenders CLTV (combined loan to value) underwriting requirements. 

In our previous example of $4k net monthly income the disbursement would be as follows: $4,000 Net income$1388 principal loan repayment to majority partner $1305 (50% of $2612) to majority partner$652 (25% of $1305) to each minority partnerAs your parents, they might not require or care about the same rate of return, or a return at all (except the equity position) especially if they're planning on utilizing the property for personal time.

The first plat has the house (recently appraised at 154k) which requires more work than we'd like to put into it.

@Victor Del Hierro why wouldn't you buy a primary residence, only requiring 5% down, and then rent out rooms while you live there?

.), and it also requires the property to be in my name (not in an LLC).Does anyone know of a bank that will do HELOC on rentals in NC that do not require the property to be in the owner's name and/or is not limited by how many mortgages you already have on other rentals?

But it doesn't require a great amount of the capital. 

I previously underwrote small business loans and we would require a PG on all loans.

Was your tenant offered a preliminary inspection during the two weeks prior move-out as required by law?