I think a return on invested equity analysis outlining a few scenarios with my models would answer your questions. 

If you have equity and decent credit, a conventional Fannie Mae HomeStyle (or the Freddie Mac version) would likely be the better option instead of an FHA 203k loan (which will require a 3rd party HUD consultant to oversee the deal in addition to having the contractor involved). 

One of them stepped into 175k of equity, another into 70k and the other was able to walk into 40k of equity.

They offer zero equity value, though.

With the caveat that I'm much more familiar with traditional private equity funds than real estate investment funds, I would caution that the returns waterfall is extremely favorable for the GP.

Quote from @Brendan M Hornung: I reside in Southern California and started my investment journey in March of last year by purchasing a sub-to single-family home in AL.

If you need that equity that soon you may just consider holding out to sell the house outright5.

Some hard money lenders lend at pretty high LTVs, leaving little equity buffer to protect your principal.

Long-term, look into refinancing once property values increase to lower your interest rate or pull equity for your next investment.Good luck!

Some have more than $1 million in equity while others have less.4.