Funny, seems like this thread just keeps breeding house-hacking interested ME's, as I am one as well, I've been listening to the past BP podcasts after my brother turned me onto them, and now trying to get involved in other ways to continue moving forward. 

Ive been wanting to get involved in real estate but funding has kept me stuck.

I was more or less thinking about it as providing a one up to competitors, but did not think about the risk involved!

Standard foreclosure laws and protections apply. 

My question is, can I get a heloc without it having appraised or should I have it appraised then apply for a heloc?

As you pointed out the prior 1031 is complete and not affected or involved.

If FHA applies to this unit it would be a violation 

You'll then need to apply for the Certificate of Occupancy, pay the fee, and then wait for the inspector to come out and tell you what needs to be fixed. 

Well how involved do you want to be?

This will give you an idea of how much involvement you will be expecting once they rent.