I actually just go a project financed with them doing a partnership and we have it in an LLC.  

Functionally speaking the 70% rule in my understanding is to what you should max offer, not necessarily what they are going to ask or accept.You have a house with ARV 100,000 and are asking 90,000.

I'm also concerned about the logistics of how this will actually function.  

And...no...not the good kind of house hacking that we talk about on here, lol.The bad kind where someone holds all the functionality in your house hostage until you pay $X. 

I was wondering how conventional loans work when in a partnership.

So I could do work on the boiler to make sure it's as efficient as possible, make sure all the radiators are functioning, and make sure the thermostat is always set to a reasonable temperature. 

We took the second floor to the studs and rearranged some walls to add a bath and make a bedroom for functional.

It's taken a lot of time and energy to get the property functioning correctly.

For the most part they are looking at safety issues such as making sure all fire/smoke alarms and carbon monoxide detectors are functioning and interconnected where if one goes off so do the rest.  

The Cap rate is a function of your net income and property value.