im in Orange County CA and there is a huge market here for room by room rentals here. i've been doing this for quite some time (over a decade now), and it certainly has its pro's and cons. my advice if you go about this is make sure you do proper vetting before moving someone in... not only for financials/ credit-worthiness, but also for temperament and expectations in a co-living space. we ask a lot of questions like "how do you handle conflict?"

If you see WSJ Prime + anything less than a point  it usually means the bank has a great deal of respect for your creditworthiness, really wants to fund your project or combination of both.

@Seth SmithIs that in place tenant credit worthy and strong?

In contrast, hard money lending usually comes from specialized lending firms or investors and focuses on the property's value rather than the borrower's creditworthiness, often featuring higher interest rates and shorter loan terms.

🏦To get to the point where you can avoid personal guarantees, you’ll need to build your business credit over time:Open trade lines in your business’s name (utilities, vendors, etc.).Make sure you’re reporting payments to business credit agencies like D&B.Keep your debt-to-income ratio low and maintain good cash flow.It doesn’t really matter if it’s an LLC or S-Corp—what matters most is establishing the business as a strong, creditworthy entity.But yeah, in the early stages, personal guarantees are almost unavoidable.

The bank is primarily concerned with the borrower’s creditworthiness, the property's value, and your ability to make payments.Private Lenders: Private lenders are more flexible because they focus on the property’s potential, the borrower’s experience, and the deal itself.

How do you verify the creditworthiness or ability for the students (or their parents) to pay the rent?

Down PaymentTypical Down Payment: 10% is a common down payment for seller financing, though you can set this anywhere between 5% and 20%, depending on the buyer's creditworthiness and how much risk you want to take on.Advantages of a Higher Down Payment: The more a buyer puts down, the more equity they have in the property, which can reduce your risk of default.

The video should tell you if it's really collapsed (credit worthy) or offset which is typical and expected. 

Unless one of the officers or owners of RAD needs a new house in which case the company has millions available to issue that highly creditworthy individual investor money at below-market interest rates right out of the corporate coffers.