I'm sure they have many opportunities to make a lot more than 4% on their money so it makes sense they would get a mortgage on the property.

It would probably make more sense for you then to quit your full time job.

The correct treatment would be that each of you would have been reporting a % of the activity of the property as tenants in common in the absence of any other ownership structure.  

Just throwing it out there as an option if for some reason that makes sense for you :)

Is there anyway it would make sense to use the potential cash flow from a steady renter at say $3,200, pay for the pricey foundation with a HELOC and not have to sell at a discount?

if you are going to be investing a lot in one market (especially if it's your home market) I think having a license makes a lot of sense.

Preserve CapitalAs we move from 1 to 2 and 2 to 3 does it make sense that our strategies would change?

I would like to network with people who have similar goals and learn from people who have done this successfully.If someone can share with me how to calculate a 'make sense' rental investment?

First off, you need to identify if these people were scammed by this common fake PM scam or if they are in fact the perpetrators.

It is commonly referred to the "Due on Sale" clause.