If the tenant is claiming to be living in a hotel, she may try to get you to reimburse for that cost unless section 8 has a new process to reimburse them for this... which sounds absurd but I'll let you deduce whether or not you're dealing with someone who is used to paying for things out of their own pocket. 

Im thinking about paying the bank the 50lk that we owe and the taxes.

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.

The tenant fails to pay their last month's rent and leaves the place needing new flooring and paint.

I use my license for multiple activities: Of course- comps, when buying and when selling, tax data- to see what I am about to pay when i own the home ( for long term holdings), check the DOM (days on the market) for the subdivision I am either buying on, or when I plan on selling, etc. 

Now, you need to figure out how to find deals and pay for them.

Doing this will indefinitely defer paying tax on profit or depreciation recapture. 

You have to put more money down and pay a higher interest rate and is limited to only 2% IPC.

I guess the different strategies FOR ME would be.A- Find a lender that would actually do the refi and pay the tax.B- Sell a property and use those funds to lend as they would go back to the IRA. 

I'd start the refinance process right away, or just pay it off, or sell.