If you're young, use your ability to move frequently (every 12 months) to take advantage of the ability to get a multifamily financed as in the previous post. 

I recently read a book by austin kleon "Steal like an Artist"   Basically nothing is original.

. - If the home has a ducted HVAC system, this may be a good place to start with a bill that high.

Also, there are a variety of issues that may preclude the ability to get a HELOC. 

I would not worry if you have the ability to keep rents lower than your competition.

your ability to pull cash and pay down the HELOC will depend on your value of your "investment property," that you're currently buying after you fix it up.If the value is high enough you'll be about to get out a new cash out loan that is high enough to refinance your current outstanding debt plus provide sufficient proceeds to pay down or off the HELOC so that way you can rinse and reuse it again on a new property.As long as you gauged value correctly on the buy side of the investment property you should be fine.As for how DTI is calculated on the HELOC, it depends on who you go to for a loan but typically we'd take the current min monthly interest payment on your current monthly obligation.Some banks had higher hypothetical payment models (assume 1% min monthly payment on the limit of your HELOC) which threw your DTI off, just try to avoid banks like this...

You're being sold a bill of goods.  

It is not necessary depending on your ability level.

What we are looking for:-80% LTV on refinance w/ cash out if needed-5-6% Interest rate-15-30 year fixed no balloon-Ability to do Multifamily and single family

My first reaction is that trying to bill separately for sewer could turn into a billing (and potentially legal) headache.