Is the 5 property ceiling (estimate, of course) because of debt to income ratio?

You can accept the settlement. 

This is even true for student debt.I recommend the old-school, proven technique of paying off all debt.

Maybe they know the owners or were able to get the owners to let them see the inside.The process would be significantly improved if there was an expiration time for the owners to become current on the tax debt. 

@Muhammad KashifMost debt funds are equity only as they don’t take on leverage and are “cash only” when they acquire / lend on assets

You should refinance your long term debt into a DSCR loan and then do a heloc on your property.

Eliminate debt, establish a budget, and save.

If you offer a settlement, they have a big advantage in the negotiation. 

I think that losing the HELOC should create a little better cash flow but at the very least it will put some stability into my debt service. 

Its still your debt, though, and it would now be the first mortgage and your new loan would be a second.