(So you don't help to build up the rest of our medical bills through the medical system of course.)

When the economy tanks and the sponsors compensation is drastically reduced, the sponsor makes the decision to maintain there lifestyle at the investor’s expense. 

So you have to refinance to take out cash after you have exhausted your line of credit and reduce rate and go back to one loan.

This might offer more security but also could complicate tax reporting.Taxation of Y as an S Corp:If Y is profitable, electing S Corp status could reduce self-employment taxes, but it also comes with more stringent IRS rules.

Michael is correct, you would want to ensure that a cost segregation study / bonus depreciation would actually reduce your tax burden before you get a cost seg done.  

If you have family living in there, I'm guessing they are paying reduced rent.

Consider paying down the high-interest debt strategically if it outweighs the potential returns from new investments.Additionally, understanding Real Estate Professional Status (REPS) and Short-Term Rental (STR) tax savings can significantly reduce your tax bill while building your portfolio, enhancing your overall financial strategy.

The purchase of the unit is going to be sooner a few months, you could wait to rehab both at the same time which could potentially help reduce the costs of the rehab. 

Put reduce current year taxes as an option.Lots of people miss the forest for the trees and do it for that purpose.My answer for top 2is:Store of valuePrice appreciation

Although HELOC'S are available on 2-4 unit investment property homes, reduced Max LTV's, rates and amortizations can make $250k+ equity lines even more restrictive.