I can eat outdoors at a restaurant probably 300 days a year listening to live music on the patio. 

If that is the case, you should just eat the cost. 

This allows you to set up a weekly payment plan and ensure you contractors can eat and you can sleep easy knowing the work was done and there is not a bunch of your money in someone else's bank account that might not show up next week.Now for materials, I recommend having your contractor buy them or put together a list of materials they need for the upcoming week.

The problem you usually run into is the HOA usually eats up all of the cash flow.

You may need to eat this one. 

FHA is good due to the low down payment but the up front MI is very expensive.... in addition, you have to add .8 to your rate which is going to be your monthly MI so it will eat into your monthly profits; you cannot drop the MI, you would have to refinance to get rid of it. make sure you properly calculate the payment with all escrows and re-run you numbers...

Eat at the DFAC/chow hall and put your money into high interest bearing accounts that are fairly liquid.

Being 100% financed would basically eat away any possible cash flow for the properties I'm looking at because of the HELOC interest.

These will eat into any cash flow/profits you expect to make. 

Are the capital gains going to eat a chunk of his profit?