In addition to assuring the tenants have sufficient insurance, there may be local licensing requirements (on you, not them) for hosting short-term stays ... here, stays of less than a week technically make you a hotelier, not a landlord.If you allow tenants to sublease, you give up control over screening and vetting who stays in your property - yes, your tenants are still accountable, but you could be taking on more wear and higher maintenance with no benefit.

I did get a chance to speak to local credit union and they assured me they could do 90% ltv HELOC for a $500k max on new construction home purchase.

And the assurance that work is available.

I have wonderful guidance and mentors involved in the deal to assure the completion and success of this project How did you find this deal and how did you negotiate it?

They don't like the "due on sale" clause in the mortgage paperwork...even though right now if the note is performing the lender wont come near it even if title is transferred.I'd say overall a sub 2 deal is more in the favor of the buyer as it gives the buyer the deed...contract for deed leaves the title with the seller until the loan is paid off thus assuring the seller that the payments will be made on time.

I assure you they are on BP with an avatar and everything as investors

I'm also active duty Navy stationed in San Diego, and I can assure you it is possible to invest here using a VA loan.

1983+ you're assured NO LBP, asbestos, OR galvanized plumbing.  1979-1982 it's variable as many of these things were working themselves out of the system. 

What's $1k for proper assurance?

I assure you, it's rarely a choice since the traffic situation is miserable during anything resembling commute hours and public transportation... not so much.I remember the market from back in 1999 when I first came out here to work for a budding startup.