What is the extent of the damage and can you include any pictures?

I definitely agree pulling funds out as needed in a HELOC is a much better idea than getting a whole new cash out mortgage at MUCH higher interest rates unless you have some great opportunity in mind for the money (where the higher rate to get cash would still make sense in the big picture). 

Pictures of every single project are required in order to get paid.

Not knowing the complete financial picture, the recommendation was to seek out a CPA to determine whether or not an entity made sense. 

Also tell anything about the property that might help form a better picture of what you're working with.

Real Estate is just a part of your total financial picture so don't become too focused on just real estate.

You need to tighten up your budget and work on getting your HELOC paid down.Without knowing your whole financial picture it is impossible to answer other than pay down the HELOC.

I think you might want to look at the bigger picture.

Real Estate is just a part of your total financial picture so don't become too focused on just real estate.

Last week she sent a picture of a small hole in the linoleum floor and crack in trim which looks like she dropped a heavy piece of furniture.