@Blair Boan I do not have an answer to your question of which choice you should make, rather I would like to persuade you to an alternative path.  

The bank that owns my mortgage will not do a HELOC in my state so I'm looking at the best alternative. 

Others will suggest alternate paths but all require more work and more time.

Hi Everyone,I am looking for some possible alternatives on paying back a private money lender.

Too often I have seen the true cost blurred by tax credit and other financial perks.Hence why energy efficiency was being encouraged over alternate energy generation above.  

I not by any means an expert, but I would suggest having alternative outs planned for anything you might buy for a student rental in case a project doesn't pan out.I've recently found the Tallahassee Investors Network and those guys put together a great gathering once a month that I'd highly recommend you make the trip over for.

Alternatively, would a lease-option work better?

If not, and the umbrella policy costs less than registering the LLC in RI, it is just another alternative you may wish to consider.

Managing Financial Products.More than one in five Americans reported engaging in non-bank, alternative borrowing methods (such as payday loans, advances on tax refunds or pawn shops).

There are alternative loans for manu homes usually about a 1% or higher rates I think.