I reached out to section 8 multiple times but they won’t increase the payment without a signed lease from both parties. 

.- This unlocks cash to allow you to buy a new larger home for your growing family(congrats) with 5% down (Since it's a primary residence)- This allows you to exit the current home and cash in on the $600 cashflow differential(minus the monthly payment of the HELOC, minus maintenance and plus tax savings ).Could be a strategy that works well for you, please feel free to reach out if you want to talk shop and run the #s.Zach

When buying a prop, with a tenant already in, YES, get a copy of the HAP, agreement and lease, Call the office and make sure all is in order, DO NOT trust the seller. 

The more you do projects with them, the more you can ask for more in the partnership.I started real estate more than a decade ago, trust me, I did all type of deals and saw all type of stuff.

I calculated a $4800 monthly payment on a 15 year term after 10% down.

He quickly found himself in a bad position with a balloon payment coming up fast. 

as a single property owner, do not want to pay full price as there may not much of need of reports, looking for state specific lease and ACH/Zelle/paypal kind of payment options for application fee and Rent collection. any recommendation on which plan would be best?

I would pay the 2500 but I dont trust the seller to get the place to pass.

From looking at a lot of areas like San Francisco to qualify for a DSCR loan you would have to put down a 50% or more down payment. 

Get a good down payment.