So I don't know why some people were automatically opted in and some like me were not. 

I'd also get proof of their insurance and say it must be active for the duration of their lease...and write rental insurance as part of the lease, so if they cancel it, you can get rid of them.

And if so what are the pros and cons of this neighborhood?

@Luke Bricca Yesss...my heart is really in renovating and giving houses a new life (did that with my own house pretty much) but alas I live in the Bay Area so there is nothing I can afford here....or anywhere nearby really... plus a small kid (so travel is hard), so hard to travel frequently and supervise a contractor, etc. 

So some of the statements made by the OP change the tenor of this discussion.

Use the top three or four discriminators so applicants can screen themselves.Then you need to have clear screening criteria yourself.

I’m new to out of state investing , so any pointers would be greatly appreciated. 

If so, maybe its not a good deal to begin with. 

Have the loan officer you are talking to model out both, so that you know you can close on the multi fam once you close on the HELOC.

We're currently looking to purchase a property for <$500K so Phoenix is not a good fit necessarily for this first investment, but may consider increasing our target price for future purchases.