I am a big believer in always looking for ways to capitalize on lost revenue opportunities on a property.

@Allan Anderton You would refi so you can pull your cash back out to reinvest into the next deal and continue to recycle your capital over and over again to ultimately grow your portfolio.

When using the 50% rule, does that include vacancy and capital expenditures?

I have access to some capital and even some private money beyond that, so I am ready to go.

I would recommend the house hack first since you have built up capital it would allow for a low cost entry fee and still having capital.

Anyone used Water Street Capital out in New York?

As long as your in the position to capitalize, this can be the striking point. 

Lima One Capital, Corevest, B2rfinance, Fundrise, ColonyGoogle investment property loans.

Being that you are only putting 3.5% down, you may have enough left over from your HELOC for another property or some capital improvements on either propertyScenario 2 (refinance on current FHA): Refinancing the loan will allow you to get a 30 year fixed rate on the property you are in and then have the ability to get an FHA on another property.

Generally in partnerships, you would split any capital improvements just like you would split any cash flow or sales proceeds.