While annoying, it works in a good cop/bad cop scenario. 

What is your scenario looking like ? 

Below are some general notes on DSCR loans:* usually used for single family or 2-8 multi family unit properties (fits your scenario)* must be for investment, non owner occupied (if looking for a product for alternative qualifying solutions for owner occupied there are other products)* can close in a personal name or LLC* usually 80% LTV for a purchase (20% down payment) & usually 75-80% LTV for cash out refis* prepayment penalties vary and are optional, but the higher the prepayment penalty, the lower the rate / options typical range from no prepay all the way up to 5 year prepay and structures vary for how those penalties work (3 year is my most popular by far)* appraisal most likely required and paid out of pocket during transaction* can be used for long term, mid term, or short term rental properties * generally 1%+ is the desired DSCR ratio but you get better rates if the ratio is higher (usually rate breaks kick in at 1.15%+ or 1.25%+) and you can still get the loan done if ratio is lower than 1% but the rate will reflect that (DM me if you wand help learning how to calculate the ratio)* the average time to close is 21-30 days* fees vary lender to lender and product to product, but $1595 underwriting plus title fees is pretty standard* 700+ credit is preferred to get max LTV, but plenty of options if credit falls below that* a typical loan minimum is $75k (have limited options for $50k+) and typical loan maximum is $3-4m (have limited options for $4m+)* 3 months reserves usually required, having 6+ months will usually result in better loan terms, 0 reserves can still get the job done if you go with a program that allows you to use the cash flow as reserves* 30 year fixed, IO, and ARMS available

The industry found better ways to make pop cans aluminum versus metal, recycling became more common and 35 years later, you don't hear about this anymore.

Can someone explain how using the Heloc to purchase the property with cash, then rehabbing it, then renting it out and then refinancing the home would benefit them in this scenario?

Best case scenario, you can extend the timeline and close on it with a HML.  

Worst case scenario, I own the land again, have paid off my note on it, and made interest income off of it.

While there are several reasons why you can be targeted for an IRS audit (including running for an office, it seems), the most common reason is the IRS computer finding enough "red flags" in your numbers. 

I'm trying to assess some specific scenarios between these platforms, and how some of these challenges are overcome with them. would appreciate any insight you can offer.

Offering a credit instead of actually doing the repairs is quite common.