Basically, anything other then 25% down and bank financing could qualify.Using a HELOC for a down payment is a pretty common strategy.You need to look at what the extra costs of the HELOC will be and figure that into your calculations, probably off-line in a spread sheet.

Hi John, Nothing about this would be easy but I would apply basic wholesaling steps. 

Which basically means that if the property changes owners, they could call the loan due.

Basically, they'd want you to have 20% of the $3MM to qualify for the LOC. 

I know that the unit was bought in 1999 for basically nothing, and now it worth around $300 K.

Identifying lenders is basically a waste of time until you have a property under contract, ditto for interviewing attorneys, accountants, etc.

Some other basic steps are pay of high interest rate credit cards, student loans, and any other debt, set up an emergency fund, and buy some life insurance. 

However, it’s basically wasted space at this point and is about 1000 sf or maybe more.

Basically treat this like any tenant who tells you they are just choosing to not pay rent.They are probably hoping you give in and let them use the deposit for the last months rent which is obviously not recommended.

I have seen plenty of posts discussing growth in the area and some basic analysis shows that properties are certainly priced favorably (price to rent ratio, etc.) when compared to my home market.