.- BTW: the $1300 includes all utilities being paid by the landlord.

That's three months of mortgage and utilities, the cost of flooring, and the cost of painting.

Here are the key numbers:Potential purchase price: Mid-$400k rangeAppraised value: Estimated at ~$500kRehabbed comparable properties (comps): ~$580-600kMonthly PITI (with 5% down, including mortgage insurance): ~$3400First-year PITI (with 2-1 buydown): ~$2900Monthly income (after taxes): ~4-5kLiving expenses (utilities, groceries, etc.): ~$1600Savings available: ~15-20% of the purchase priceCash to close: ~$34kRehab estimate: ~$34kRemaining reserves: ~$20-25kTo fully fund the rehab, I’d need to come up with an additional ~$15k in the short term, which I anticipate paying back quickly once the rental portion is generating income.

Over 4k in damages, utilities, past due rent, court fees, tons of trash, holes in walls, pee everywhere, etc. 

(Like RC Wiley) The money losing warranties offered by utility companies.

I do own two triplexes in Scranton, and I will say the one issue is that you are going to be taking care of the utilities normally if they are not on separate meters, which could take a good amount of money away from your overall cash flow. 

This really puts things in perspective and helps me what I would need to do if I consider utilizing this strategy.

You'll want to incorporate interest costs on the HELOC while you're using it, but that will add to your holding costs in addition to utilities, closing costs, etc..

When making offers I want to utilize the standard 70%-ARV-Profit formula.

However, most property management companies utilize every available platform to maximize exposure and lease properties as quickly as possible.