That said, even with conservative rental income estimates, my living expenses would eventually drop to several hundred dollars less than what I’m currently paying in rent once the house hack starts generating income.I do have cash reserves to weather some rough patches, but the idea of pushing my budget this hard makes me uneasy.

My plan is to funnel the rental incomes from all three properties, along with my W2 income, back into the HELOC while covering all expenses from it as well.

@Muhammad Kashif Flipping a property in 6–9 months results in short-term capital gains, taxed as ordinary income (up to 37% federally, plus NJ state taxes up to 10.75%).

Your income isn't high enough for it to make sense as a rental and the closer you get to your residence limit the greater pressure you will have to sell it before losing your exclusion in whole or part. 500k right now can make $15k per year income with zero maintenance or tenant risks. 

And then your REI income matches your W2 income the first time etcTo your question: equity is the name of the game.

The net rental income should be about 65% more than the mortgage. 

First, banks do not prefer W2 income over 1099 income at all.

I'm confused why would you say that rental income is taxed in an IRA?

For example, require a minimum FICO score of XXX, gross monthly income X times the rent, and verifiable income for the last X years.

Income from leveraged real estate or active business income.