The alternative of refinancing your current home -- definitely do that NOW before you move out of the home, then you can re-instate your VA benefit and re-use it.

So some of the things your group needs to consider is:1) whether everyone will be active or not2) if some will be passive, are they getting compensated in equity or debt3) if there some passive investors, will the costs associated with syndication justify using this structure. if not, what are the alternatives. perhaps giving all partners a role to keep them active.All has to be discussed with a securities attorney. 

It's like BRRRR for houses but for notes and it's the secret to being a lender and not running out of cash :-)and an alternative to selling  a partial were you get hammered for discount and fees.

One drawback to a HELOC is that if borrowing against a rental property or other investment properties, banks will be less likely to issue a loan, since such borrowers are more likely to default.If a HELOC won’t work for you, there are other alternatives such as a traditional home equity loan, a cash out refinance, or a personal loan.Leverage the equity in your property to increase its value, or fund more propertiesKey Points:1. 

Alternately if you really want to commit a bed to that space, you could make a murphy type platform.

An alternative might be to get a bunch under your belt and then put them all under a blanket loan, you may still run into issues with minimum values, though.

The alternative is the Fannie Mae Homestyle Renovation loan which allows for investors. 

Costs also include changes to your current planning and other risksThere is so many problems with places allowing tiny/alternative houses that unless you are really in the boonies and a really well visited area by short term types, I doubt it is a viable longterm plan

If the only issue you have with them is the late rent but always paid, why would you at least not consider an alternative that benefits both parties? 

Alternatively, is there an advantage (tax-wise) in holding on to it as a rental for any period of time?