In my state, they offer a free energy assessment (its called massave) and they give free energy efficient light bulbs, surge protectors, showerheads etc.

This isn't something like "Can I learn to install a light switch" - it is truly changing the core of who you are and how you deal with tenants.  

Furnaces break, water heaters, roofs, etc.As your question, as noted, every traditional lender will want to see stable income coming in to support the recurring mortgage/HELOC payments.  

I am not from the Hilton Head Island, SC area but hopefully I can shine some light here.

Renting an SFH by the room can produce crazy good returns compared to traditional SFH rentals!

@Owen Hawbaker any traditional bank or mortgage company is unlikely to give you a 100% loan on your first rental property.

The repairs are bid at 15k (paint inside and out, laminate kitchen floors, new carpet throughout, replace kitchen cabinets, reglaze bathroom tiles and tub, roof repairs, new light fixtures and electrical work, and some other odds and ends.)

For me, that means no carpet, semi gloss white, cream or light gray wall paint.A renter needed...it will take 2 years of rental income on your tax return for many lenders to consider it as income.HELOC is variable while 2nd mortgage is more often fixed.

It wouldn't help you a ton to refinance into a traditional conventional loan, as you would reset your owner occupied clock, and would need to stay in the property another year (give or take) before you could secure a new owner occupied loan.

@Jamie GoldenbergIf you don't have enough capital for a traditional investor 20%-25% down payment and you will be living in the property; I would suggest a FHA loan with 3.5% down.