I already bought 4 units additionally in another town, and I want to 1031 this into another property as soon as this closes, so at this point, if any appraisal comes in at 280k+, we will take it. 5-10k is not worth the headache of dragging this on another few months, getting another inspection report, etc.Honestly, I thought about that option of "bridging the gap".

Do you want the Million dollar homes in addition to the very low end?

That solves the variable interest rate problem and allows you to pay off the HELOC and use it for the next one.In addition, most HELOCs have very low fees.

Agency debt is also not going to be possible under $1M (as pointed out by @Mark Allen).Best bet: Either find additional capital partners, tap into bridge loans for short-term financing (while you sort out your liquidity position) or pass on this deal. 

Additionally, similar to what @Omar Khan was saying, you typically see a larger return as a percentage of the purchase price in lower income areas.

I would plan to pay for majority of upgrades with a line of credit.I have a few additional reasons beyond monthly cash savings to sub-meter the electric: 1) There is one thermostat in the house, controlled only by tenants in the largest unit.

Person C gets approved for the loan, but only up to 80% of the appraised value of the house, which comes back at $5k less than Bobs original asking price, which means Person C now has to come up with an additional $20k to close the deal.

Why are you paying $300 in additional brokerage?

Any additional advice on how to proceed would be much appreciated. 

If you have an area in mind I can ask my rep to add it to the list and I would be more than willing to share it with you guys.