However if I were in the other people's shoes I don't see wanting to give you a no-payments loan for $200k for a year and a half, and only making 4% on that money for 5 years unless all the co heirs are independently wealthy (possible but seems unlikely).  

I would counsel them to do a 5 or 7 year with a balloon at the end (which could be negotiated if both parties agree again into another 5 years of installments), but, anyways.In your shoes, I'd try to negotiate it so you get help and advice and the partner is along for the ride, but give up as little long term free cash flow and - more importantly - equity in the property as possible.

Be concerned with cash reserves and percentage of leverage you are comfortable with. 

I agree there are some risks and also dilution in cashflow because of HOA , but these are class A areas with around 7-8% cap rates - so as a part of a broader portfolio, I felt comfortable with a 30% mix of such investments.

Most of mine are in the 11-12% cap rate, these just make me a lot more comfortable.

Personally I would not take much comfort in second position. 

I have different rules of thumb for that state, that type of house, and the types of tennis shoes I use in that location.and if someone else were going to do the exact same rehab, but with different contractors, different finishes, different contractor management style and different negotiating skill, that $25,000 wouldn't be accurate for them.That's what I mean by it being possible to have shortcuts and rules of thumb, but being very specific to you and the types of houses you look at.

Shoe box, spreadsheet, whatever. 100 doors.

I think in that situation, rather than pay what I view as nothing short of extortion, that I would buckle down, get comfortable with the eviction process, evict, sue them for the rent and any damages owed, and draw a hard line as appropriate in all other areas of dealing with them.

Learn how rentals work with this first investment, DIY as much of your own maintenance and property management as you feel comfortable with, get your feet properly wet and your hands property dirty.