Sounds like this relative is coming with all cash...Tax implications aside, you need to figure out what sort of payment plan you can afford from the investment.If this is a flip, the relative gets paid back the principal when it sells. 

Does anyone know someone who knows someone who this might be  interested as GP/KP (general partner/key principal?

We have done two seller rent-backs - one with our principal residence (1 month) and the second on an investment property. 

Here's the math part:$200,000 loan amount 3.5% interest is $898 principal and interest$200,000 loan amount 5.5% interest is $1,136 principal and interest at a cost of 2 points, but the seasoning period is only 4 months.It doesn't take long for the little of bit of patience to pay for itself using those very realistic numbers.Now, having said that, if you can't qualify for any of the myriad reasons people don't qualify for conventional financing, there's an entire industry of loan originating professionals waiting to take your application and close your loan.  

I plan to hold and continue to rent out both units, having the tenants pay down principal and interest and continue gaining market appreciation.

Subtract that payment amount from your current principal and interest payment.

Your description is pretty confusing about that.I would be happy to help and assuming I understand what your numbers are, I would use the positive cash flow from 2 rental properties as principal payment for the HELOC.One of the advantages to using HELOC on your primary is that your monthly interest-only payment is low.

However, I'm considering using an 5 year interest only loan rather than a principal & interest FHA loan. 

I currently own 3 doors myself but only 1 of them is here, my principal residence in Abbotsford.

As a Bay Area investor, my guiding principal is that you make money on the purchase.