More secure and stable than an STR (also less competition) but you aren't in the red like you'd be with an LTR. 

He's on SSDI (Social Security Disability Income) at just under $1,500 a month and he wants to do some wholesales to make some extra income.Lets say he does a deal or multiple deals and makes any assignment fee on it/them and the profit exceeds 1.5k which is higher than his disability per month.

Do you have a way to secure more off-market deals? 

The letter confirms the amount of security deposit and the "paid through" date for rents.

not to mention also they become zombie notes collateral will deteriorate pretty quickly if they are not winterized and secured ( which takes time and money)

Ask him what makes him feel more secure in the deal?

A Heloc can never be used as a PITI reserve, or an asset instead its a debt burden and an additional trade line on credit.A Heloc carries a higher risk when it comes to security meaning if you miss a payment even by mistake or for any reason, your scores drop, or your balances start to change your DTI or usage percentage.

You would need to file a proof of claim for the monies owed and hope you secured it by a deed of trust.

Also look at having a security alarm and cameras put in.

Not sure if we can mention names specifically here in the forums so you'll want to search Google for rent collection for landlords or similar.Highly recommend having security deposit and rent hit a separate bank account from your personal.