@Marty Rogachefsky, if you repaired the old refrigerator that would be a maintenance/repair aka an operating expense but by replacing something that had reached its useful life its a capital expense and is depreciated.

Hypothetically if I win a bid, then would I be able to utilize a HML for any possible repairs now that they'd have access to inside the property?

To build that kind of portfolio you will also need help with financing, locating, inspecting, repairing, etc.

It is almost as hard to buy a fixer upper at a price that will cash flow after repairs. 

But how can we draw a line between repairs and replacement?

If the property is bleeding money every year from repairs, maintenance, or turn over you'll never get ahead.You can tap equity with a HELOC (challenging right now), cash-out refinance into a new loan (much higher rates), 1031 exchange, or sell (tax hit) but the numbers and property condition need to guide this decision.

I got free repair estimates (inspections) from two roofing companies.  

Roof was flashed and repaired in May.

There has been such a journey with renovations and the person repairing the property, but hey!

So my plan is to use the equity in my own home for the downpayment and for the repairs and take out a conventional mortgage for the house itself.