Hello Joshua, I suggest you read the book on Rent Property Investing, Brandon has a lot of great information that really helped me a lot.  

Any thoughts or suggestions on how this should be handled?

I wasn't recommending it, I was suggesting to run it by a CPA. 

My suggestion  for you is to join some local REIA and find contractors there. 

A HELOC cannot be used as Reserves or assets and PITI assets are required when you buy more REI.When you look at the blended rate having a HELOC and a 2% rate again it usually causes a higher payment over a simple refinance. 

Does anyone have feedback or suggestions on locations.

That's the retail price you received less the wholesale price you paid.But, its not that simple.

@Evan KreppsMy take, at least ... keep it simple for the first one. 

On the phone he suggested doing half seller financing where he would hold the note for 15 years at ~7% interest rate.

It's just math, know ALL your numbers, YES, it's that simple.