I would only use the heloc if you plan on cashout refinancing one of the properties to pay it off once the rehab is complete. 

This means that if the bank forecloses, and you can’t pay it off, you will lose all of your money with no recourse to anyone.One option to secure your loan is if one of the partners has a free and clear property worth significantly more than your loan.

We’ll pay to get it fixed that’s not the problem.

My parents had to stop paying the mortgage and I could feel the stress radiating through the home every time I visited.

Do they pay within 5 days of the first of the month (in some states that is not late)? 

What if you told the tenant you would pay them XYZ if you could sell the property before foreclosure?

They sent a new contract trying to bind me to still pay $200 per month, which I refused to sign.

All you're doing is paying for that NCF upfront. 

If you want to keep it, then would you refinance that new build to pay back the HELOC? 

They pay their bills on time and make good tenants.