In both scenarios, I will use the equity in my first rental via HELOC to either cover the conventional loan's down payment and fund the rehab or to fund the hard money down payment and meet the reserve capital requirements.

Sure, this COULD be a cash grab by the city, but maybe there are some good intentions behind it? 

Especially when a month-to-month lease is based upon payment presented at the beginning of the term.

One the tenant has been late every month on payment.

I think in most of these areas you'll need to ensure your cash flow is sufficient for multifamily and you have a path for driving valued through increased NOI via increased revenue and/or expenses.

I have the reserves in place for the 5% down payment, 15K for emergencies, and have no debts! 

I'm starting to feel saving some towards 20% down payment now would be a good idea as my loans have 8 years left on them and not really a rush to get paid off.  

Purchase price: $380,000 Cash invested: $80,000 Acquired my first property in Broward County, FL!

(One month you may have a lender that can do cash outs on listed properties, another month you can have a lender that does not have seasoning on a BRRRR) Cons: 1.

And does he help you find financing if you don't have any money for a down payment?