@Trevor MorrisIf you are looking to do value add renovation for your next investment, a HELOC seems like a great move. so long as the other investor is okay with loaning out the HELCO money as well. 

I financed it with an FHA loan with 3.5% down.

I'm assuming you're using a loan and the bank requires itGood luck 

The security deposit can't be too much so I would advice give it back to avoid a larger long drawn out issue. 

Another consideration is to get a portfolio loan that will take on both properties at an average rate which will give you capital through a finance (refi similar).

You will want to sign a short term lease agreement and get proper deposits for them such as last month and security.

But right now, I wonder if a total newbie in this should really be trying to get a small loan (50k) to purchase two house around 60k each?

The house is uninsurable without repairs.We qualified for the loan with the assumption the house is livable. 

I had a 5,000,000 unsecrued LOC and a 10,000,000 secured..

You really need to have a term on your loan that is less than 30 years.