We checked... this 401K will only loan on primary residence.

." - Did you use to live there as your primary residence?

I am currently looking for creative financing because since I am still in college I do not have the work history that they are looking for in traditional financing. 

They make more money if you succeed than if you fail, so they do more due diligence than a traditional bank does.

I like your HELOC strategy for pulling money out of you primary residence then using that to buy another rental.

So, the bank assumedly "bought" the property at a "real" auction because (1) it wasn't happy wtih the bid amount, or (2) it wanted to pursue the owners for the negative equity, and needed the property to sell at the fair market value.That makes me think it is clear this is the primary lien. 

B is working class, traditional neighborhoods with stable occupants. 

IRA - SELF DIRECTED□Do you have a self directed IRA that you can utilize for non-traditional IRA investments, including appropriate real estate investments?

Your primary state of residence and principal place of business comes into play with many states. 

Can I claim that $5k first year startup cost deduction if it's for future rentals but is also my primary home?