In doing this, their money is secured by both a hard asset and a personal guarantee. 

Think earnest money, rents before they are disbursed to the client (you) & tenant's security deposits.

Yes, the debt is what I am leaning towards simply because the property isn't so big that I need a partner to secure a loan.

Corresponding  property management will decrease by 25%.

In any event secure the HELOC now when it is available.

I'm wondering what happens when you get n offer accepted and go under contract but cant secure financing with a HML.

Tenant's first offer to me is 2 months of rent ( last month, and security). 

I think  a promissory note secured by the property would then transfer title to you and they would have a note secured by the property.

He is willing to sign a 10 year lease at $7,000 per month with a $20,000 security deposit.

There were a small amount of negotiations around securing tenants in the downstairs apartment at the price they identified and cleaning up some odds and ends (asbestos abatement, fire safety items, etc.)