You can also use rental income for Conventional, but not without a 15% (duplex) to 25% (3-4 unit) down payment. 

It started as an FHA loan but had to switch to conventional.

You can still get a 30 year fixed conventional DSCR loan for rental properties.

If a conventional loan is only available in your personal names, transferring the lot from the LLC to yourselves before the exchange could trigger IRS scrutiny and potentially invalidate the 1031 exchange due to the same taxpayer rule.

It was on the market for a long time because it didn't qualify for conventional financing will it being unlivable. 

Conventional How did you add value to the deal?

Also, at this time I had seen properties selling for 10 – 20% over ask regularly.Interest Rate 30 year conventional 7%Homeowners Insurance = $1,000 annuallyRents = $1,800 per monthWhen I looked at those assumptions, I would need to put down $80,000 on this house to get it to hit my cashflow goal of $500 minimum per month which equates to 35% down.Total mortgage + escrow = $1,267.13 per month with rents at $1,800 my monthly cashflow is $532.87.From my experience, after taking out vacancy and maintenance costs you are left with around 73% of that total cashflow number once the rental is established.People have asked why a $500 per month cashflow goal.

Case 2 sounds like a conventional loan.

I'm curious why you want a HELOC instead of a conventional loan in the first position.

We have only ever bought residential sfr with conventional financing so commercial lending is totally new to us.