And another one bites the dust.

I'm no appraiser but have plenty of fix and flips as well as new construction but IMO, it will be existing home. 

Many buyers/investors are using this strategy to invest in real estate

Quote from @Marcus Auerbach: I've researched this and I believe it's vague on purpose.

Quote from @Sarah Kensinger: Reach out to @Jeff Chisum and see what options you may have for this property. 

Here’s my question: Should I use my w-2 income to pay down a lot of principal and re-try to obtain that HELOC?

when you find a deal and want to secure it, you put it under contract.

Honestly, it is a lot of work, and there are some big pitfalls you want to avoid, but its not rocket science. 

When investing in real estate, having multiple exit strategies is key.For a single investment property, make sure the numbers work for both scenarios: 1️) If you decide to sell the home, the deal should produce a solid return. 2️) If you need to rent it out, the rental income should cover expenses and provide a profit.Flexibility is what saves you when things don’t turn out as planned.

If this is a bad deal because of $1,500/yr in interest run away and have your family sell the property.