Managing and owning property is a constant process of losing the battle to win the war. 

If you raise 5% and lose a month you will have a net loss.

You can lose your butt out here if you don't buy right.

Because, the lender is entitled to know what risk they are taking with their money.That being said, on seller financing, if someone gets sued and loses, the lien/judgement can be filed at the county, (it's not automatic, someone has to prepare and send the paperwork) which the bureaus will pick it up on producing a credit report.

I hate using the HELOC because I am losing money on interest but I wanted to keep growing. 

but, should you buy a money pit and lose thousands or tens of thousands of dollars? 

Convince yourself that there's a better than average chance that you will lose, and if you can live with the time, energy and money spent if you do. 

The WORST result for you would be losing your EMD which is exactly what happens if you don’t go to court.

If you build a buyer's list and you send them deals where the repair costs aren't close, you will lose them.

If they suspend/lose their license, they're dead in the water.