Typically, a PMC issues monthly owner statements.

At the end of the year, I share that sheet to my accountant and he does my accounting without any issue. 

Is it a headache or is there any type of legal issues with this method?

You will pay a higher interest rate and need a bigger downpayment.What you need is good STR insurance with plenty of coverage to protect you.An LLC offers some protection with contract issues (like kicking someone out during their stay) vs negligence, which is what you need to watch for.

In my market, this can easily lead to increased home prices, closed transactions that had no inspection where there are a lot of issues that could have been identified by an experienced agent, and a bad taste in the consumer's mouth.  

Could you share with me what bank you found that issues HELOCs on Rental Properties?

Here is an excerpt from the link @Fausto Carosella provided which I interpret as excluding an offer to buy: "3.

These tend to be mostly cosmetic interior rehabs (not always but usually) and you can usually avoid the big hidden issues that single family homes can have (structural, environmental, plumbing etc).

I have 8 rental properties financed through conventional loans and I’m having issues getting more. 

I told them that I wanted to see repair bills etc. and proof that the issue is actually solved.