I will pay the money if I can do 1 or 2 deals in the next 4 months.

I don’t know when an LLC starts to pay off if you don’t have any partners.

To pay for this, I used a heloc on my current home.

Keep in mind of the I/O(payments/period) and game plan on how fast you'd like to pay it down. 

Paying for a Section 8 investment course is the equivalent of an aspiring cook paying for a course titled: How To Boil Water

With the exception of building a trailer on the property (these are hard to finance), this sounds like a good plan AND if you are using it for your business AND your business pays more than 50% of the rent (if you have more than 1 tenant), then this is a more financeable property in the eyes of banks and credit unions as it would be consider a commercial "owner-occupied" property. 

You pay 10% penalty plus taxes (lets say state and federal of 25%) - so you are paying $70k in taxes so your $200k is now $130k.

Go to court, judge will hear them out and then ask; "did you pay the rent."

But I would not consider what the seller needs to make in determining what I'm willing to pay for a property, especially when youre buying a problem like this.

Using mortgage debt at 6-7% on a refinance to pay off higher rate debt such as a credit card at 15-25% is a savings!