Further, the property may qualify for larger loans based on the increased cash flow ability to service debt.  

There are some that are great for sure, but I have currently heard terrible stories about people putting money in the last 2-3 years and losing it all, capital calls and losing the whole deal due to bad bridge loans (some coming do very soon). 

For example, I mention that every adult must pay a $30 application fee, pass my credit/criminal background, make a combined income of 3x the rent, and whether or not the property accepts pets.

The advice I have received is that HELOC’s should be used for short term loans only with a definite plan to pay it off. 

@John BowensAre you loaning from a pre-tax 401K or did you convert to Roth and then loaning from there?

I have built up enough savings to purchase a multifamily property with an FHA (3.5% down) loan or Fannie mac (5% down) loan.

@Robert QuirozIf the owner already owns the property without a loan they can cashflow the property even if rents are below market.

It sounds like the issue is with the Debt Service Coverage Ratio (DSCR), which lenders often use to determine how much they’re willing to loan.

I would highly recommend doing a renovation loan like the 203k or homestyle - you are able to leverage SO MUCH CASH for such a low down payment. 

Loan terms seem reasonable.