For those funds we work with that do allow leveraging, we normally skip the bank and arrange the line through institutional lenders.

You will probably want to hire one to draft up a contract for the arrangement anyways.

Caveat: in virtually all LOC arrangements, be aware that the bank will be able to "call" the line of credit at any time. 

Its the same in Canada but you have to make arrangements with your lender that your corporation will be owning the subject property 

Your better off just working out an owner financing arrangement than these wacky lease option / master lease arrangements all the gurus push .

You can arrange detailed reimbursement policies etc.

A solution is to formalize your business arrangement and keep it strictly business.  

To those of you familiar with these types of arrangements, I'd love to hear your opinion since I'm not adept at personal lending.

Well  I always bake my tenants fresh gingerbread Men with a divine peppermint frosting then add little gum drop buttons arranged ever so neatly in a row .

Its best to get you plumbing separated first (including running a new service line from the house to the property line) then arrange with the utility contractor to get the second meter.I would not be surprised if it costs $4-5k when all is said and done, and could be more.