Your strategy takes advantage of your employment cash flow and ability to control discretionary spending.  

Dont spend your hard earned money that should be going to buy assets for a class..

You indeed have to spend that much money.

I'm going off the understanding that you still need to spend 500+ hours in the business to achieve material participation (please correct me if I'm wrong). 

But to me that would be a spending problem, not an income problem. 

For REP status federally, you must meet two requirements: work 750+ hours in real estate activities and spend more than 50% of your total working hours on these activities during the tax year.

Who is monitoring budgets and spend?

I'd say start the process of securing your HELOC if you havn't done so and spend time analyzing deals and determining what type of investor you are looking to be. 

Learn to control your spending and pay off debt.

I spend less than an hour a month dealing with them.