HELOCs generally are not so well suited for long-term debt as a mortgage.

You can start there, but I know small town politics very well and I'm sure they "omitted" to see the deed restrictions. 

Well, in the Springs, I just had a situation where the permits weren't closed for the basement work and it turns out the city was about to tell the sellers to pull out everything.In Denver, if you want to do Airbnb in your basement apartment, the city has been cracking down on STR licenses if they don't see a permit for the work.

I've done this with my properties because I'm well known in my small town and don't want people to know what I own.LEGAL PROTECTION: By placing your assets in an LLC, you are legally separating them from your personal assets.

Was the property well managed, or poorly managed?

Quote from @Bob Stevens: QYes, I've heard there are some cities where Section 8 pays very well.

You have to stand out from the competition to do well since there are so many rentals there.

She's a realtor as well and we find that no one cares about your properties as much as you, so over the years we've become GC/property manager/realtor. 

@Sasha Josephs that's a question I had when I first started as well.

We have medium-term rentals in Denver (and Colorado Springs), and they do really well.