You should be going into the project with your eyes open in enough time to make revisions to the component in the project.

Its likely you'll be able to find a place that has some of those components that don't need to be touched for quite a few years.A conservative approach when analyzing a deal is one thing, but if you model only the downside, you can make almost any deal look bad.

Is there a value add component or are you just buying cash flow?

There are companies you hire to do it or you can do it yourself by understanding what goes into a credit score and working on the components.2) Get a partner with a decent credit score.

Surely I’m missing some key component here?

The key component is that the HELOC is based off of the average daily balance and the mortgage is amortized.  

And your generally dealing with a home that is 20 years old or less.. stucco  tile roof  newer components etc no freeze thaw issues.. easy desert landscaping. 

Depending on the asset it might be best for a seller to use the PM company just to manage and a transaction broker for the sale and marketing of their property.I am in the commercial brokerage and investor component you mentioned.

Cashflow is 1 of many components to consider IF you are going to be a direct active investor in a real estate investment.  

Appeciation is just on component but the most significant generator of wealth.