If I bring you in as a creditor and allow you to provide me with such data, I'm relying on you to do so in compliance, properly and accurately.If you fail in your duty I'm responsible, the only recourse I have is to hold you responsible and if you lack the ability to cover any error, omission or intentional acts, my recourse is limited.

Would I be better served to use cash as down payment for new properties or pay off 1 property and get a line of credit or cash refinance that would be more than enough for down payment of new properties.

I would think the court would want to make the creditors as whole as possible and selling the property is the only way to do this.Have you gone through a process like this before?

What form does that equity I take out come in (credit or cash).A little more detail in the numbers:Mortgage include Taxes, and insurance.1300.00Mortgage Intrest 2016: $ 6,596.60RE Taxes: 2,508.89Payoff: ( 9/1/2017) 162,733.53Income: Unit #1: $1875.00Unit #2: $800.00Yearly Water/Sewer 550 per unit.

@Shelby Ashley I would be interested in knowing if there are any lenders providing Lines of Credit or flip financing.

However, everyone's comments has made me realize that maybe they do not have the best credit and want to live the lifestyle while they build up their credit or while they save money. 

Eventually after time  and knowledge they will get approvals and build credit or go the secured credit card route at first.The PAID option to speed up the process.

The goal is to have my personal name out of everything a creditor or disgruntle guest could fine.

It might be an issue with legal citizens who have poor credit (if charging a double deposit is not allowed), but I'm sure anyone who's undocumented probably won't complain as they may be having hurdles finding a place to stay and don't want to draw attention to themselves, so they might pay a double deposit.If it's legal in my area, I think I'll do that, charge a double deposit for anyone who has poor credit. Or

Avoid Credit and Liability Risk: Investing passively allows one to avoid being exposed to credit or liability risk.