Local and regional banks offer HELOC products with all sorts of different terms.Moving on...Keeping $100K in the bank isn't a terrible proposition right now.

There is nothing inherently right or wrong with investing out of your area but whether it makes financial sense will depend on the specific investment thesis/value proposition you are pursuing. 

(Assuming your lease has language on notification) If you think you can win that argument in court, your risk is $60. 

That being said, I appreciate your desire to "do things the right way" and actually make it a legal, habitable space.There are many illegal/nonconforming units throughout the city, so many, in fact, that a majority of the time these units go unnoticed, and continue to be used and even rented out for years at a time without ever having any issues; however, the concern and risk is always there.

If you take out a HELOC it is an open end obligation which banks consider risky considering the primary homes LTV/CLTV. 

🤣Then again with retail on the decline and eviction moratoriums that could be risky as well.

.- Partnership is risky.

Advise ple Yes love this idea but is dangerous /risky.

Do you think that this project can be profitable enough and not too risky?

Fact is, there is risk to putting your properties in an LLC and a risk to not doing it, you need to decide for yourself which risk is more reasonable for your situation.