My guess: if you fail to negotiate, she’s wont leave. 

Should i just stop stressing and go apply for the heloc so i can start investing now or should i actually wait and pay down my debt because i most likely wont get approved for a 95 or 100% heloc?

You get one wackadoodle owner in a small regime and it can destroy your investment. 

The bay area is a prime place for appreciation you simply wont get in other areas of the country. 

now this might be extreme and likely we wont see a 20% drop in prices anytime soon but hopefully you get my point.  

If my lenders wont work (due to the state) I would talk with other hard money lenders in your area to see if a seller carry back will work for them?

It has the potential to destroy the friendship.

I relisted the property, i guess she wont be moving until i get it rented..Ive told her she can leave but will charge her only for days property stays empty.

My lender emails me tonight and is requiring a 12 month policy or else they wont fund....oh and I am suppose to close it 2 days and have already had a few extensions.

They kept telling me that the wood chips destroyed their landscaping, that the wood chips were causing allergies to their children and burning their lungs, etc.