That's basically "dead money" sitting in the property that could be put to better use - say through refinancing and then investing into another project - which will result in higher return for you and your investors.Having said that - I also own houses (I have 45 of them) and I prefer them to be free and clear.

In the meantime my cash is sitting in my savings account earning .02% interest :( My question is for other private lenders, where do you keep your funds while waiting for the next deal?

It probably makes sense to sit down with someone who has achieved what you are looking to do and go over the various methods, risks, and concerns you have.

I might be recalling the 2bd/3bd rates incorrectly, but in my one bed it is $60 flat.

I've considered simply buying properties with that cash and avoiding financing all together, but I'm afraid that will lead to a significant portion of my cash "sitting on the sidelines" more often than it's being put to use.  

I see the value of the Limited Partnership, we definitely need to sit down with our adviser on that one..

Just wondering how an agreement might be worded in an instance where I might be taking money each month to pay back myself where a partner might just let it sit in the property’s bank account?

It sounds like you need to sit down with the builder and be clear about your expectations, how things went well and not so well and get a timeline and construction draw schedule based on work completed in writing.

Once you go beyond 10 years your HELOC will turn to a principle and interest payment (with an adjustable rate, OUCH).If you plan to pay it off quickly, avoid closing costs, and sit on some cash without paying the interest up front, then this isn't a bad idea.

I read this article the other day and thought the different perspectives were interesting: Ray Dalio warns 'cash is trash' as Warren Buffett sits on $128 billion.As the title of the article suggests, you basically have Ray Dalio (billionaire founder of the world's largest hedge fund) arguing that "cash is trash" and warning investors against sitting on large amounts of cash, the value of which could get eroded away over time.