I want to create a fund that will allow me to purchase distressed homes, fix them up, and sell with owner financing (possibly including a 5 year balloon so as to be able to recapitalize periodically and give investors a shorter horizon).

When a rental is taken out of service for personal use the accumulated depreciation goes away over a short period of time. 

I was considering taking out a $240K HELOC with a 10-year draw period and pulling $160K from it to build the next rental property.

So before I transfer ownership back and start a seasoning period, I thought I would ask if there were any solutions I am not finding.  

You said in your post  "If the notice was delivered by mail then the notice period begins when the Tenant actually receives the notice."

Educate the land owner on the potential profit run the numbers and go over the basic proxy and blue prints.Make sure you have a seasoned and qualified Builder/GC because they can be a deal killer with wasted time and inflated material and extended completion dates.

I am trying to calculate my returns over a 10-year period using the rent-by-room strategy, which results in significantly more cash flow than traditional rentals.

A personal liability policy "MAY" extend to one or two rentals but if you are planning on building a portfolio consider the commercial umbrella.Another thing to consider is that the courts frown on carry high personal liability but low business liability when trying to hide behind the vail.

I doubt if you'll have any issue with your hold period since it is all about your intent anyway.

What is the time period required before refinancing?