The thought of someone building right behind me makes my skin crawl.

I think the terms @J Scott laid out would be very fair - if you have no experience and no skin in the game, I wouldn't be agreeable to lending any money on it.

Regarding the cash reserves- It's not about using all your reserves but you must some skin in the game.

I'm really not looking for a yes/no, to my "untrained" eye all the numbers seem ok (expenses don't seem under-estimated, the increase of ~250$/mo/door rent over 3 years seems reasonable considering the area, sponsor has some skin in the game and they have been in business in that area for a couple decades, ...), so I was looking to some more seasoned investor willing to share with me any clues as to how this deal might be bad (the only one I can think of is that returns might be very tight if a downturn occurs over the holding period, however since this one is not a class-A SFR property it should be more resilient).I would be looking to invest about ~50k$ in this, which is a small enough portion of my net worth (< 10%).Thank you.

Private lending may work but you still need skin in the game and the interest rates are more than conventional mortgages.

I finished the drywall myself in my basement, and did the mud, tape and texture. 

Obviously someone has skin in the game, but to say that those strategies are "junk" to sling books is just not accurate. 

You also need to ask yourself the following questions:  Do you have money to invest ("skin in the game")?

Even though we have some funds available to invest (skin in the game so to speak) we are looking at about $30k in closing costs which is like another deal all together.What creative ways have you all found to cover closing costs?

Probably 5% skin required, but not allowing a gift is odd for that type of loan, check on that again.Your idea of a co-borrower is probably best.