Never done it either, we've been approached to lend by some investors looking to do it.The risk of insurances rates skyrocketing or simply being cut off makes it extremely difficult.You also have to consider rental demand.

If they are simply joint owners of real estate through a partnership, his w-2 hours would not help for REPS status, they would hinder as TP would need to work more hours managing their personal rental properties than working at the w-2 job and meet 750 hours managing them as well. 

Go through your budget and see where you are spending money-is there anything you can cut (eg vacation, meals out-I have no idea).

Cut your losses and let it go to foreclosure!!

They really don't have the power or right to place any kind of lien on the property while they simply have it under contract and aren't doing any improvement to the property. 

Not having individual meters is simply unprofessional.

The biggest issue I observe amongst real estate investors is the inability to articulate the reasons why they should transfer properties or simply own properties from day 1 in an LLC.

Simply letting your mother live in the property rent free would make it personal property. 

You may want to wait a little bit more until we see a significant cut in rates. 

I don't think I fully understand using HELOC to pay points and holding costs only.Taz, that was my initial thought as well - even though it would hurt to get rid of a 3.5% interest rate, I could get an equivalently priced home with today's conventional primary residence rates and have about the same monthly payments that I have today, simply because of the HOA fees.