Then develope an exit plan to limit your loss.

I am not in favor of limiting bank’s abilities to create money in the least.

Which tends to limit your buyer pool.  

Some might want to control the deal ...

My question though, is how do these investors "value" the lien and set a limit on how high they are willing to bid?

You are giving up all control for the possibility of saving a few bucks on a repair.

But, when investing with two people, it is better to do that via limited liability entity with an operating agreement so that it clearly is written what happens when someone wants out and stuff. 2) Looks Like your LLC is pretty straightforward, so you can actually do it yourself or via lease zoom, and it can always be revised once you have few properties and get more complicated with other members.

Here's a sample of fine print:“Borrower shall occupy, establish, and use the Property as Borrower’s principal residence within 60 days after the execution of this Security Instrument and shall continue to occupy the Property as Borrower’s principal residence for at least one year after the date of occupancy, unless Lender otherwise agrees in writing, which consent shall not be unreasonably withheld, or unless extenuating circumstances exist which are beyond Borrower’s control.”Different lenders have different "fine print" statements that may be more grey and confusing.

And I can't have all fixed windows in my rental as egress is necessary and I can't really control whether they open windows.

@Sergio CastilloI've yet to delve into the partnership stuff as I'm a control freak...