Can he keep showing the place and when  he get someone else ready to pay and move in, can he cancel the section 8 process? 

My guess is yes in which case, get a copy of the document and let the family pay the back rent. 

Lenders also want to know that the property will bring in enough money to pay back the loan.

But when I add in the cost of paying on the HELOC as well, it gets even farther from penciling.

I'm sure you will gain some interest from potential investors then maybe they can supply you with the down payments and you can pay them back over time and you could buy more per year.From what I know, business is a slow game and from what I hear, successful Real Estate Investing can be boring.

Are you planning on it being a super quick flip and don't want to pay the rates on a bridge loan?

For example, one of the linked sites above says Illinois is a landlord-friendly state.

It's very hard to remain anonymous in CA, and while a great goal, often comes at the cost of a very cumbersome structure to maintain, explain, and pay for in the meantime. 

You need to take the time and pay the fees to learn or like you said you’ll end up paying a lot more for a deal gone wrong. 

So, I am not sure how I would pursue damages and unpaid (2 months rent) if I wanted to.In hind site I should have kicked them out, but I didn't - lesson learnt.