This bill was not in my personal name or my LLC's name.I'd love for anyone to either validate my perspective or provide me with a new one. 

@John Barrett Thanks for that perspective... makes a lot of sense.  

I don’t say that boastfully, I say that to give a proper perspective so that new investors don’t jump in with unrealistic expectations. 

Question is from a tax perspective for both sides to be fair, is this best structured as  1) ‘loan’ them the money, put a lien on the house for that amount, keep it in their name and collect interest/‘rent’?

This might be important if you're looking to manage your DTI or debt to income so you can keep your purchasing power open for any deals coming to your desk in the future.You're only limited to 50k or 50% whichever is lower with your 401k anyway.The HELOC on the other hand will cause your monthly payment whether interest only or principal & interest to go up which will increase your DTI and leave less room for future qualification depending on the deals you purchase with these funds.From a credit perspective, having the HELOC might be better because now you have an additional trade line reporting good payment ratings to the credit bureaus assuming you pay your bills on time.Ultimately, its good to use a fine balance of all sources based on your risk preferences, speed of execution or purchase, financial position today, and your deals you have access to to get this capital to work on your behalf.Hope that helps.

I'm including the mortgage costs, which are higher with the higher purchase price, but I wanted to get other perspectives for a future purchase down the road.

You had an electrician come out to give his perspective, and everything checked out fine.

All valid points to take into consideration, and having heard multiple opinions from different angles it helps to put the objector’s arguments into perspective now.Thanks again for the feedback, my husband and I will use this information to figure out a plan for us moving forward.

As @Steven Ko mentioned, if viewed solely from a tax perspective, financing is always going to be better than straight cash. 

Obviously, I have experience with FHA from a real estate sales perspective, but I haven’t had any owner investors use it yet so I honestly haven’t done a ton of research into the actual regulations.