Once you've got some experience and a team in place ready to handle whatever rehab nightmare you might encounter then you can consider the risk and reward of buying an auction property sight unseen.  

So crown molding and a false box typically costs another $5 per linear foot.

I'm trying to explain it gets very easy when you have experience and a track record.You did not list very much of the benefits this partner would have by partnering with you.

So now I have a HELOC of $70k and a mortgage of $160,000 on a house with $250k in value (the rental).

@Tiffany Ralston - I use the marketplace and for silver level coverage (80% coinsurance and a doctor visit is like $25 with prescription coverage) it is $500 / mo just for meI don't have any pre-existing conditions and do not take regular medicationIf anyone has a better / cheaper solution I would be open to hearing it 

There is a nearby project that completed a nice mixed use and a few on the market with the same idea.. i'm pretty sure the zoning would allow. the projected sales price is based off a nearby sale in 2016 -  that sold for around 400k per unit. i will do more research on the zoning and check and double check what can be built and get my numbers right... but then what.. i know the project will make money... my issue is how to fund it and move fwd 

A local real estate attorney can draft you a note and a security instrument (deed of trust, etc) for this lending arrangement.It would be good to have a loan servicing company handle calculating/collecting payment for a small fee (like how property management companies manage your rentals for a small fee).

There is a comparable house that has sold for $10k less than the asking price of this home, and it was move in ready, slightly bigger, and a garage.

The aluminum frames look very thin which helps with the view, and a vinyl replacement would probably have thicker "framing" and would block some of that view.

It’s rarely worth the LLC investment with only a few units, and as you’ve found, it makes finding money harder (or at least more expensive)A $1M umbrella policy will protect you from just about anything.