Such a horrible loss.Regarding your property, I think as the trends in the report continue over the short term you will be able to sell closer to full value in coming months.

Lease Terms: Determine a monthly rent payment that covers the HELOC repayment (interest and principal) while providing some positive cash flow for you.                    

Read and follow your lease, don't allow your tenant to dictate terms.

call a few brokers and just see what their terms are.

Since you’re considering converting the upper unit into a short-term rental, you may also want to implement strict rules around smoking or strong odors in your house rules to avoid future issues.

Will you use the HELOC as a short-term bridge, or plan to hold it longer?

Your primary insurance policy with $300,000 in liability coverage should be sufficient in 99.999% of all lawsuits.5.

For your situation, it sounds like a seller financing purchase could be a good fit as well but this would also have limited options and the terms wouldnt likely be great.

Something more passive via a syndication could work for them, and otherwise they'd probably prefer something simple like a long term single family rental. 

I am interested in learning all I can about Long Term and Short Term Rentals.