We also buy Value Add properties with a plan to sell after we double the investors money within a 3-5 year period.  

My best friend has been waiting on a condo that's is a short sale .

@Mike BarryYes, your income will be lower both for tax purposes and for loan underwriting purposes.Lenders look at your ability to pay back the loan, and stashing money into your retirement account does limit the money available for repaying the loan.That said, declining to fund your 401k just to qualify for a loan may be short-sighted.

Moreover, if you're planning to use the 2nd unit as an STR (short term vacation rental), AirBnB and similar, you'll likely need to get a license from the city allowing that.

Short of crowdfunding does anyone have any suggestions on how I can approach potential investors about helping me come up with this down payment ?

Our short term goal is to buy our first property within the next year.   

Has anyone had any experience with lenders that will still do HELOCS for short times on deed or does that matter?

I have heard many of times on BP investors using hard money to do short term deals such as flipping or rehab/rent then sell.

I'm not an expert on the law but have been a part of the development of the short term housing ordinance in LA (from the perspective of someone who shares their home). 

We are needing a short term bridge loan to complete the transaction at closing.