Basically, in cases where you take on debt in order to make a distribution to the owners of a business, the portion of the debt related to the distribution may not be deductible. 

How does the company deduct their fees, and how much do they charge for their service?

Currently he is clearing roughly 2300/month in rent after deducting utilities, which at 115k purchase price is at the 2% mark, assuming @Joe Villeneuve's calculations of 550/month in cashflow is accurate, that puts it at roughly 23% CoC assuming 25% down payment. 

Also, keep in mind if HELOC Is used to purchase an investment property the interest is tax deductible!

I would only spend money that is a benefit to you (e.g. improves the value of the property) that also creates an immediate tax deduction for you.

Sure you can sell the home when you retire but will the proceeds of the sale after taxes and broker fees really net you a profit after a down payment and decades of property taxes, debt service, mortgage interest that you can no longer deduct from your federal taxes, repairs and homeowners insurance?

There are brand new pass through deduction rules that are pretty complicated but can give you a big benefit if you qualify. 

If you currently still owe @ 265K, then they would deduct that to pay your current lender (PNC) and you would be left with @$61K - $83K, which you could collect as cash in hand.

I would assume, like everyone above, that you can deduct the lost rent and utility charges from the tenant's security deposit.

Her car insurance would cover it, if she has full coverage, but then she has to pay the deductible.