Odds are there is deferred maintenance that you will need to account for. 

Just a matter of finding out whats right for us given our restrictions not being able to leverage (through banks and lack of a credit score at this stage)

I don't have any restrictions on how I can use the heloc.

I'm also looking for a general labor crew: someone to install toilets, lay laminate flooring, screw in odds and ends, and build a custom kitchen island.

I'd say that the odds of this being an accidental oversight are between zero and zero.

That's odd that you cant find anything on the county site. 

I don't know if you're aware but this building is under rent control and the 2nd unit's $1,900 rent cannot be raised much and there are tight restrictions on removing the tenant.The type of buyers this property is perfect for are two separate parties (think friends or siblings) buying it as a TIC with each party occupying one unit.  

Conventional financing will be cheaper but it will come with more restrictions.  

Unfortunately, this puts you at odds with being an investor.

It does seem odd that they would stick all the debt on one person though.