Often a line of credit is not the best vehicle as nose bleed rates that non-owner occupied LOC command. 

I'm and experienced STR owner and manager and multifamily owner operator, so I know about 28 day minimums, local regulations, underwriting, insurance etc.

Lets say the investor didn't use credit or anything related to credit metrics to buy the property (maybe own cash, OPM or HL, by the time the "refinance" part kicks is, what happens if the owner has credit issues and the financial institution won't proceed?

Welcome to the site @Brittany Henry!

If my client wants to sell to an owner occupant, usually brings more competition and a higher price, then I ask them to give notice and we’ll list once they’re out as we cannot have tenant holding over and ruining the closing.

Go to his site and you can pay a little to Target any questions you may still have with Nick's research and advice.

The HO6 policy is essentially a home owners policy for condos. 

Who knows.Another option would be to buy a small parcel and slowly build a house with/for him and pull owner permits.Am I nuts?

While reviewing the landlord registration forms, I saw a remark stating that if the property owner does not live in the same county as the property location, the owner must choose an in-county representative to receive official documentation on their behalf.

I was renting this home then approached the owner and asked if they'd be interested in selling.