If you are taking on debt for the STR this gets a little more complicated, but not much. 

Regarding the HELOC question, consider the interest rate on the debt.

I understand if you want to sell 1 of the lots, but I'm not sure about your concern about paying off the debt so that you own it free and clear. 

After closing, work on increasing your income, reducing debt, and preparing for a second mortgage.

Eliminate debt, establish a budget, and save.

Well, what would be happening is that your buyer would be buying your house subject to the existing note, since you can't legally sell the property without paying off that note or transferring the debt to the new buyer.

If I go the multi-unit route I would put myself in debt for a bit, which is fine for long term investment.

DSCR Loan (10% Down Possible)Debt-Service Coverage Ratio (DSCR) loans are based on the rental income, not your personal income.Some lenders allow 10% down, though 15-20% is more common.6.

Are they going to start paying down that credit card debt, turn over a new leaf, and avoid bankruptcy for the next decade? 

That's before you pay any debt service.To answer your question: No, it's generally not a good idea to lose a bunch of money every month.