The alternative view is Vegas prices have only dropped more than 5% once in it’s history.

We originally liked the blank slate idea of the house but I'm wondering if the material cost for bringing in drywall, ceiling, floor, etc. for the entire house might end up being higher than the alternative option.I would also appreciate any feedback on the BRRR (is that the right amount of R's) strategy we are looking to employ for this venture.

I was at 9 units only about 2.5 years ago. 95% of my financing is with local banks.Do not neglect another source of solid income, whether that be a job or an alternate business.

Alternatively, have any of you found any good unsecured loans as an alternative or in addition to a HELOC?

Alternatively, you could work with other investors who are looking for funding (ie Memphis invest), they don't require you to put 100k+ down to invest, or JV with someone who has more experience and knowledge than you. 

I looked briefly at their website and they are expensive (from a landlords perspective) compared to the alternatives.

Is it best to find an attorney and have them drawn up or is there an alternative resource that is state specific? 

Alternatively, if it's really worth $210K you could always sell it for $210K. 

Alternately your lease has a set termination amount.

Alternately you could send them all a notice explaining the situation and indicating that if there is another fine that you are simply increasing all rents to cover the potential costs.