You have numerous funding options so pick your poison.

My question is that due to numerous unfortunate circumstances, two properties that my partner and I purchased (through a program) were underscoped, and we cannot move forward financially.

Meaningful home building hasn’t occurred in SoCal since the post war era.

There are numerous threads about sub to and many investors believe it is a high risk strategy (especially for seller) and believe buyers who use it “take advantage” of naive sellers.  

They confirmed our appointment by text, email, and call numerous times before our scheduled consultation.

Based on the purchase prices and the things you’re describing these are obviously “D class” “hood” “ghetto” or whatever the kids call it these days (“war zone”?).

When you are there, you don't think of it as middle-of-no-where but an exciting place with acres and acres of civil war memories but in fact it's just in the rural PA - fields and forests/game land.

There have been numerous people on BP talking about how they paid application fees but they could never get their loans closed on any deal brought to the company.

There are numerous reasons why they usually do not make good rent properties. 

It also allows gives you greater flexibility.Plus, once you flip the home and make a few dollars, you should be able to pay the HELOC to a zero balance as well as having extra funds to throw in your war chest.