on the HML did U not get a first position mortgage or deed of trust with lenders Alta ?

Could be a business decision based on keeping long-term high quality tenants rather than risk the costs on turnover. 

I've had a positive experience.

You have used home equity lines of credit to purchase investment rentals and want to know the best way to pay down the HELOCs.Between the two properties you bought, after expenses, you have $250 a month positive cashflow to use.What I like to do is pay down some principal every month with my positive cashflow.I use my extra active income from real estate commissions helping other investors to pay down the principal even more which just frees up that credit for me to use again.I know I can refinance the HELOC debt before it changes to principal and interest as it is just interest only payments as yours are.One difference is the cashflow, I have greater positive cashflow and could make the principal and interest payment in the future with the extra cashflow I already enjoy.I always get HELOCs on my income properties as well after purchasing them to pull out as much of my downpayment as possible.

Completely agree with you on this; I'm not making any claims to the quality of these lenders here.

We didn't know the siding needed to be replaced because it was just recently replaced by the owner before selling it to us, but probably with bad quality paint/siding. 

Again, treating folks with housing support funds with the same dignity and respect as everyone else, usually nets quality clients that listen and do their best to follow the rules.

Regardless, you might find the copy & paste info below helpful:)--------------------------------------------------------------------------------------------------Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?

HOWEVER, you can still find deals that hit the 1% rule and positive cash flow.

Have to agree with most here in that a SF-> duplex conversion needs some really specific qualities to be worth the squeeze.