I decided to keep the house and rent it out, currently I’m out of pocket almost $1300 to cover for mortgage. 

The idea is they want to add more long term rentals to the market to help with affordability.The mid-term market is interesting but then you are covering utilities, internet, etc.

My strategy is to use HELOC to cover down payment and convention loan to cover the rest of the mortgage.

I'm about to do a rent-by-the-room/co-living property there, since current LTR rents don't cover the mortgage with these interest rates. 

At that time the lender gave you a fixed loan for a certain period of time with so much down and a certain amortization schedule.The debt service coverage ratio example.At DSCR of 1.25 means for every dollar of mortgage payment the NOI can cover 125%Your current lender back in the day might have done say for example a 1.10 DSCR ratio because absolute NNN and investment grade so perceived risk to them was low.

The first year was tight because of higher interets rates, but his tenants effectively covered about 70% of his living costs.

But PadSplit does not handle maintenance and any member communications, our management covers that. 

If you hired an agent or a broker to work with you, you'd be covered - but regulations & laws vary from place to place.Screening is best done by establishing a set of guidelines to qualify applicant tenants, then sticking to those rules to avoid legal issues (and for your own sanity).

I have a good agent I've worked with for years and letting him represent me not only gives me the advantage of additional counsel, it also gives me someone else to do the heavy lifting so I can concentrate on the deals themselves rather than the intricacies of the actual contract, the process of moving everything through closing and all the hiccups that often come with investment properties.

And you avoid things like damaged properties (guest insurance from airbnb or prop manager themselves cover that), evictions, collections, etc.