The seller loans 40% back to the seller (on a partnership agreement)  Thus, 40% of $1 million is $400,000.That $400,000 pays off your transactional lender ($200,000 plus closing costs and 2 % point) = $215,000$50,000 is utilized to renovate the propertyYou will keep the remaining balance.Since you are giving the seller a large sum upfront, you should negotiate at least a 60-month 0 interest and 0 payments on or before(5 years).  

Over 4k in damages, utilities, past due rent, court fees, tons of trash, holes in walls, pee everywhere, etc. 

I would also contact the tax pros in the header and get their opinion and maybe utilize them for that reason. 

The plan was to utilize the HELOC as the down payment then getting a conventional loan to cover the remaining 80%.

This is a common fallacy.

Consider cleaning, lawn care, snow removal and supplies as well as utilities  in your calculations.  

So now we cover utilities for both units and the new tenant pays a higher amount too on the back unit to cover all the utilities with a great profit.  

It's a common problem in the industry and it is very annoying.

A famous quote: Do unto others as you would have them do unto you” is commonly known as The Golden Rule.

They’ll handle tenant screening, maintenance, and rent collection, ensuring things run smoothly while you focus on growing your portfolio.Ultimately, starting local and self-managing is a common path for new investors, but outsourcing property management or investing remotely can work well with the right systems in place.