But these seem like big "Ifs".Does this situation make sense to move forward on??

What to pick comes down to your individual situation.

As for starting out with no money, a lot of folks in similar situation start out as whole-sellers.

That's a difficult question to answer without understanding your current financial situation and risk tolerance.

My situation is similar to the link I post below.https://www.google.com/amp/amp.abc15.com/2292951710/hostile-takeover-state-law-allows-investors-to-take-homes.html

It takes the edge off of trying to use the money/forcing a deal since I am not paying interest on it until I draw it.But there are a couple of different variables in your situation, you will technically have to pay another set of "closing costs" when you pay off your home, whoever gives you the heloc will have to appraise, underwrite, etc. 

This situation could be a bit of a game changer for folks wanting to exit 1031 land with more tax free dollars.If an entity owns property and 1031s and subsequently dissolves and distributes the property to the members do those members inherit the requirements of a conversion under 1031. 

I was in a similar situation.

I'm curious as to how tax deductions work in this situation?

Current Situation: I purchased my first duplex back in June and have lived in it the last several months while I am giving the place a complete update (new flooring, paint, windows.. etc.).