Usually, the passive investors get the larger portion of a 70/30 or 80/20 split, with the general partners getting the smaller percentage.

The tenant had the choice to be let out of their lease, but chose to stay. 

It is even worse during the pandemic, because the Federal government prohibited eviction, causing larger debt to accumulate.

I haven't seen (or, perhaps, recognized) equity upsides any larger than this.

That being said, since they are a larger family I would suggest to them that they can pay a higher rent and keep the whole house so you don’t have to go to the expense of doing the construction with Tenants in place.

I consider it more of an art to put the contingencies and back up plans in place to exchange out of several properties and into a larger one. 

It seems like SPC is a better choice because it will last a lot longer, and is waterproof so we can use one product throughout the homes. 

Being liquid does affect the overall return on the funds; however, the purpose while it is being held is to preserve the capital for a larger investment.

I'll add that I find that these loan types typically require a greater number of discount points to be purchased in order to get to a "near conventional market rate" (i.e. what you'd get on a conventional loan for an investment property at that point in time).So, larger down payment requirements AND larger up front capital required to buy down the interest rate.

I would ask for a larger discount (over $10k) if you are in a tenant friendly state.