Also, I wanted to convey that the type of investor I describe should on;y accept a quality tenant well above what’s typically considered acceptable in the industry.  

Personally, If I could pull out a HELOC, I would use it to fix and flip which will typically make sense as you shouldnt be keeping the money out for that long and you can recycle it or pay it back and build off the capital that you got from. the flip.

Reason being HML's are typically short term loans that are interest only.

I get a lot of applications from out-of-area people, typically moving from another state.

Typically max leverage is 70CLTV - very higher Prepayment penalties and be ready for rates north of 12% - I answer this question all the time.

The sheer complexity of this matter alone is enough to illustrate the problem, but this is just the tip of the iceberg.

So if you see a foreclosure, it's not a typical thing, and the people involved are not typical. 

Typically starting with a smaller rehab budget of $50K or less (maybe a max of $75K) and avoiding a 1 to 1(or higher) ratio of purchase to rehab costs is recommend when you are first starting out. 

In southern CA, even garage conversion ADU additions are typically costing more than the value added.  

There are alternative programs out there with reduced cost, but you are typically looking at 20% down.