On the downside, with the HELOAN, I leverage only a small portion of that equity and, as I understand it, I would have to pay off the HELOAN before being able to access more (no plan to borrow more though as I don't want to over leverage).

I am a FT Domestic Engineer (aka holding down the mothership with 3 small children). 

It will be a cool format, small group networking and a topic having to do with real estate investing. 

Buy a small mf 2-4 units that needs a little work, have tenants pay most of not all your mortgage, then after time pull back out your initial investment or more.

If they are looking to "park" money in US, you can buy NNN lease - nothing for you to manage and they will even get a small return (5-7% roughly) but don't quote me on that number. 

Best to just look at cost of closing the cooler and using small units. 

- Awkward layout with upstairs steps coming off of kitchen, small living room, 5 beds with only 1700 sqft.

Most people forget about "small" things like carry and stamp costs etc.

As to your current problem, I don't know the banks there, but was wondering if you might be able to get a small loan on the house based upon it's current value, not what it will be worth after the rehab? 

The ideal way to do this is to have them invest with you and receive LP share's and maybe a small GP bonus.