Also, a conventional loan will not pay for the repair costs, so that would come out of your pocket whereas a private or hard money loan may cover most of it. , the method is meant to make for a quick turnaround. 

They have to state their down payment (called an option consideration) and their ability to cover a certain monthly payment, which is based on income.

"Fine" to the extent that person doesn't declare the property his (it is his, actually) and you the partners out of the deal.If something happens with the rental (someone slips and falls because you didn't replace the balusters fully knowing the risk and despite the repeated requests from the tenant, in which case the insurance will not cover you since is considered gross negligence)  and the person on the title gets sued, all his assets will be at risk, personal and the rental.

Does this cover your payment with taxes . insurance, and a little for repairs? 

My thought is that as long as we can cover the HELOC payment from the rent that we would be collecting we’d be fine.Thoughts?

Rent covers the mortgage (plus a little) so it's working out okay for us so far. 

That's why written screening criteria is recommended.

Our goal is to get to the point where our passive income will cover what i currently make(somwhere around 12 units) and i can stay at home to raise my boy.

I have an extra room in my primary residence and I decided the best way to start and learn would be to rent that out.I guess I am just looking for general advice as to what I should do in this situation and what I should be looking out for especially when it comes to screening. 

After looking at some info on cash out refinancing, I am now considering this as it would be a strong rental in a great area.My situation:This would be my 3rd  buy and hold...1 rental, 1 rv storage yard and this property.I have used a heloc for the 20% on each property but now if I hold this one traditionally my cash would not be enough to do another deal.I have flipped 1 house earlier this year with the intention of doing a few more to draw the heloc down to nothing by end of next year.If I do a cash out on this one I may not be able to pull all of my initial 20%/rehab out, but would be covering the notes/expenses and cash flowing some each month with a long term asset.