The objective to doing so is to leverage the position of the note for a return for the second-position lienholder, and to pull some of your money tied up out of the property... similar to a refinance?

Once you get to the point that you can leverage, like with a HELOC, you should avoid HML at all costs, literally.GIven the scenario you've outlined above, I'd use the HELOC for the purchase and my own savings for the rehab.

Recognize that some education and dialogue with them can go a long way. 

It is a sellers market and while waiving the financing contingency may make your offer stronger than an equal offer with financing, it often does not give you leverage to offer less anymore. 

My partner would rather collect his rents and not have to deal with a note, but I am a lot younger and still want to leverage to grow my wealth quicker.

If only there was some way to leverage these extreme benefits to a strike a deal.

You'll see the numbers clearly, what it will cost, and what benefit is projected, and make an educated decision yourself (with the counsel of your CPA) and stop giving money to the IRS, that they allow you to keep!

SFR's are great if you can make an equity play which you can eventually leverage.

Unfortunately , lots of newbies get stuck at the startup/education phase and never progress beyond listening to podcasts and reading  a few forum posts ... break that trend and take action consistently... 

The podcasts are excellent and its great you are educating yourself.