My husband and I are moving to central Florida this fall for work and have found ourselves in possession of a little nest egg from our previous equity.I've always been interested in REI and I really don't want to squander this chance to kick start our portfolio.

You have to reinvest it into something that makes a return or you will begin to eat into your principal.  

If keeping the house makes you cash poor and depletes your reserves, it seems like you are putting a lot of eggs in the HELOC basket.

And to your point of losing deals to locals who are willing to self-manage/self-contract: they make it work because they eat up those numbers on their end that you take into consideration when you underwrite, and they can make it work while the numbers don't pencil out for you.

Also, ongoing LLC/corporate reporting and certification can eat up a small property's free cash flow pretty quickly, so keep that in mind too.The properties I have bought have largely been in my own name - not because it is the lowest risk way to do it, but because I felt ok with the risk/reward trade off.

I'm assuming paint, general cleaning, carpet cleaning, etc would eat up about $1,000-$1,500. 

Gold Silver can’t eat I’d say buy the things that is always money right now.

Whatever you do, I would be tactful in your approach and not necessarily put all your eggs in one basket because it has the largest "potential".

From my understanding, it just seems like saving for a conventional loan to buy a first property feels like the safest path to having better control over how much house (and potentially how much rehab costs) you can afford, vs. taking a risk with long-term debt on an FHA that continually eats up your cash flow with additional PMI payments and etc. 

It's like a chicken and egg sort of scenario...I need the debt service amount to come up with the MAO, but I need the MAO to get the loan amount in order to arrive at the amount to use for the debt service.