Their lease is 6 month term with a same rate month to month however, their insurance states the rebuild of their home and fire investigation efforts are going to take 12-18 months. 

Reason is a Heloc generally carries a higher rate on a shorter term and "Can Never" be used as an "Asset, or for PITI reserves" which are both required when you buy an investment property. 

Of course "hoping" rates will come down is not a sound strategy so finding a way to assume a loan that already took advantage of low rates is a great option.If you were starting over and targeted a large SFH, would you try to maintain the property in a way that would still attract regular homebuyers (not investors) if you needed to sell?

My first mortgage was almost 11% and that was a good rate.

They already lost some major players due to the state capping rates https://www.foxbusiness.com/lifestyle/california-insurance-c... will all insurance companies stop coverage, raise rates or reduce what they cover?

While I have a fantastic rate, the co-owner's giving me the option to refinance or he'll force a sale.

Good occupancy and solid CAP rate.

Interest rates between a HEL and a refi are comparable, the equity in the property is equal to the value of the property and I only need about 50% to purchase another property.

The rates are great, but you definitely have to work with someone that knows what they are doing...

If you're comfortable living where you are, equity in your current property or your savings rate would be the two other ways to get your next one which is going to be much slower.