Most syndication business plans involve a value-add strategy of some sort. 

The LLC only provides basic legal protection.

Having them rent for a 4th year (assuming you lived in it immediately before for 2+ years) will put the increase in property value into cap gains. 

You can also require a renter to provide renters insurance that covers any risks that you require.

An additional benefit of a detailed engineering-based Cost Segregation Study is that it can increase potential insurance premium savings as well as provide support for the property tax appeals process.

But its in a less than desirable area so the bump in prices isn't going to continue - partially due to the high taxes those areas are seeing. 

However, when I told the tenant that I will provide one hotel suite for 4 people (2 queen bed with kitchen and free breakfast), she has started demanding me to provide room and board for everyone including the dogs.

I'd consult an attorney first, however, since what you are talking about providing free of charge is something that will be used to construct something on the ground.

Whatever you utilize this HELOC for, it is imperitive that you transition these funds into opportunities that provide a much higher return than what you are borrowing at. 

This often gets faster results as it provides clear evidence of the issues.Reaching out to the out-of-state LLC owner is a good next step.