Build a home and then purchase that product with a personal conventional or FHA loan? 

This is an extremely important point, because if there is no clear rules defined by each person, then it can be confusing and lead to anger or resentment between partners.

o Commercial loan, sort of - they are 30-year fixed DSCR loans with private national lenders.o We close in an entity/LLC 99% of the time - very rarely do we receive a request to close in someone's personal name.

My market’s appreciation for this century, which includes the Great Recession which was perhaps the worst RE performance period in history, is at over 5%.  

If  your rule is not to rent to anyone with a prior eviction, this person would fall under that rule.  

And what I am personally seeing the Market place today.Commercial bank/ community bank were you have significant deposit relationship and long term relation ship..   7 to 10% plus 1/2 to 1.5 points.. these are relationship and experience and capacity lenders..

We have changed our language to state the the person renting must be at least 25 and MUST be present during the entire stay. 

These areas are all great and growing really fast, in my personal opinion.

I admit it's not sexy and it's slow, but it works.If I had to do it all over again, I'd buy a personal home with 3-5% down then repeat every 12-18 months.

Owners mistakenly ASSUME all PMCs offer the exact SAME SERVICES and PERFORM those services EXACTLY THE SAME WAY, so price is the only differentiator – so, they often select the first PMC they call or that calls them back!