It sounds like he's using a percentage or general rule which rarely stands up upon examination."

When it comes to reserves, I dont use percentages for capex, I use real dollars, based on the age and life expectancy of large items (roof, hvac, water heater, and a buffer for other items).

By accurately and fairly breaking down the contract sum into corresponding values, the GC will be incentivized to push production on each task, trying to achieve the percentage of completion milestone when payment is due, typically at 25% increments. 

Some bill strictly on a per hr basis other do a flat percentage.

There are some HOA's out there that will only allow a certain percentage of units to be rented out and may have some other restrictions in the CC&R's.As for your question, the "best" way of doing something in real estate is typically subjective, but having a HELOC payment, in addition to the mortgage, taxes, insurance, and HOA dues, just increases the chances of having a less profitable property or one that may not cash flow at all.

Re-do your analysis with dollars instead of percentages and then come up with a conclusion. 

If you are getting a negative COC with the service debt, then the property will not make you any money but cost you money. that means the percentage in your original calculation, paying full price, would be the most you would make on the property. but you would not want all that money tied into one property, yes you would make money, but you may make more than the 2% in the stock market.

He’s offered to give me a certain percentage what should I do and where should I look to find buyers?

(Do you invest a percentage of your cash flow into each?)

Hopefully their fee is a percentage of the rents collected!