Hopefully it balances out and ends up net positive. 

If the deposit does not cover the charges, then you should consider whether you want to pursue collecting the unpaid balance or write it off.You did the right thing, and the tenant's behavior proves you were right.

If you use a HELOC I would do a project where you can pay it back(BRRR, Flip) and not keep a balance. 

The candid advice about balancing quality, building the right team, and adapting to challenges really hit home.

I've found that there are markets that have a balance of decent cashflow and decent appreciation and that's the type of market I eventually decided to invest in.I'm not too familiar with the different markets down there but I'd highly recommend looking into Candor Realty. 

We can’t profitably turn it into a LTR, or easily anything else.Desirability - well two favors balance out.

How do you balance these strategies, and what signals do you look for in deciding to hold or flip a property?

You lease should state a interest fee for unpaid balances.

The note investor who thought interest is paid on the original principal rather than the unpaid principal balance.  

The vast majority of "regular" or traditional (Conv/Govt) mortgages are originated by specialty lenders and brokers and are sold in the secondary market to provide yield on bank balance sheets (think Chase or BoA) or to be securitized into MBS.