Also, maybe add something to the lease such as:"Any repairs due to tenant abuse or negligence which must be done immediately will be added to the next month's rent as 'additional rent.' 

In addition set up a rehab escrow  to  fund the project.

Best to go back to your tax adviser for some additional information. 

We then give them an additional 14 calendar days.

I have done this  in the past but also require a lease break fee in addition to them being responsible for all rent until their lease expires.

In addition, I spoke to the listing agent and was told that the owner wants to 'get rid' of the home.I don't have a property manager lined up yet but if you know if any, please let me know!

Most states require you to be licensed (which you are) but your broker would also have to allow you to do it and yes you would need additional insurance.

There may be additional things wrong that look ok now, but need replacing.

I’m looking into alternative methods to house having and MFH run for $700k+ out here.At the moment, I live in a detached garage converted into a 600sf 1bd/1bth.Since the 700k price point for a duplex with max 3bd/2bth unit to rent it out of question for me, I was thinking of the possibility of picking up a smaller house with the possibility of converting a garage or building a separate addition that my wife and I would then be able to live in while renting the main house.I know CA is becoming very favorable towards ADU’s now a days and was wondering on if this could qualify as a primary residence for myself as well as me be able to use potential rental income for me to be able to qualify for a loan.Still new to BP and REI, I couldn’t find a google answer on this, so any help would be appreciated.Thanks!

There are some HOA's out there that will only allow a certain percentage of units to be rented out and may have some other restrictions in the CC&R's.As for your question, the "best" way of doing something in real estate is typically subjective, but having a HELOC payment, in addition to the mortgage, taxes, insurance, and HOA dues, just increases the chances of having a less profitable property or one that may not cash flow at all.