My thinking is this leaves me with two paths: A) Best case is I pick up the foreclosure for $1M, immediately list it for sale at $1.6M or more and hopefully sell for a > $500K pretax profit. 

The property cash flowed roughly $250 a month for 3 years and sold for a profit of roughly $80K.

The strategy involves using the HELOC for a flip to generate fast cash, reinvesting profits into long-term rentals, or exploring alternative ventures like short-term rentals or partnerships.

This is important because right now we could probably make around $200 profit after all mortgage payments, insurance, etc.

Reduce the price, make the sale, split the profits, and re-start your life.

, not so much for the profit we are making, for all of the expenses involve that surpass our profit.

This is a new underwriting guideline of the insurance companies because they haven’t been profitable and must raise the rates and lower the risk factors in order to comply with state regulations on adequate reserves and future solvency.  

Purchase preforming notes capped at half your total deployable capital (150K)Then sale the future revenue of those notes through note exchanges, doing this will allow you to hedge the US real estate volatility while turning a profit from the market  

Quote from @Alex Scattareggia: Is the problem that the property wont be profitable with the 20% management fee taken out?

Will it make a profit?