Hi guys! I need help!! This is longwinded, but here it goes... I am trying to get my funds up to invest in our first real estate deal and am having a tough time making a decision on whether to do a Heloc or cash Refi....

That's a tough situation to be in.

And his not goin to have a tax lien on his name,but I just come to bp to find the professional way to approach the situation. 

I think you will be successful house hacking in virtually any situation.

Cheapest $ out of pocket to get the best ROI given the situation (assuming you're doing EVERYTHING else correctly).  

@Nerissa Marbury  - Suggestion for avoiding this situation in the future... 

And yes tenants do tend to take advantage of the situation. 

Has anyone experienced this or been involved in a similar situation?

In your situation, I would say this deal becomes a very poor investment after you move out (especially considering your $392 monthly cashflow, excluding the cost of your time and energy spent managing it, and perhaps some utilities expenses that may or may not have been accounted for here). 

In this situation, I see a lot of investors overpay for a less than ideal asset to beat the taxation deadline.