Others may have a different opinion, but outside of a seller carry back up to 90% CLTV (still require some skin in the game, unless you go true hard money) 2nd liens on real estate for purchase transactions in the manner you're seeking are very difficult to get a loan against, whether it be a secondary market lender (private equity fund, balance sheet lender, family office, etc), and usually are seeking larger transcations ($1-3MM +) in this space, and are still capped at a max 75-80% CLTV (still wanting skin in the game).# 4 usually requires more explanation as its newer to the market (DM me if interested in discussing these options further), but all 1-4 appear to be potential options for you based on the limited details. 

I cashed out my rewards and applied them towards the balance which was very helpful!

Refinanced the $185k balance in 2023 How did you add value to the deal?

Balancing the cost and the risk while keeping your property in good shape is the game here, so take it step by step.

From what I am seeing, there is either a slight oversupply or things are somewhat balanced.

It's all about balance.

I don't see any opportunity for a normal person that can touch that in any other asset class. there's always unlimited auxiliary benefits when investing to a "home" where we can live in :- with househack, we literally mortgageless and live for free , stock index can't do that lol- lets say we live in CA but kid wanna do college in TX, we buy RE in TX and househack, almost mortgageless again- again if we keep buying property and DSCR is at least 0.8-0.9 and our W2 could offset the balance, it's another almost mortgageless investment.The true limiting factor of RE investment is the DTI.

I think it's a balance.

Now, we obviously can't assume anything in terms of future appreciation, but the way we looked at is absolutely worst case scenario we would have to sell the rental, and in that situation, would we be able to sell it for enough to cover the outstanding mortgage and the HELC balances. 

Taking your screening method above- as an investor, it would make sense that you are choosing the applicant with the best balance of income, credit, references and a clean background.