Following the legal process to the letter every time a tennat pays late until you ultimately non renew or evict has nothing to do with being nice or not.

The seller added a legal basement apartment which turns it into a triplex and renoed the garage which he rents out for extra income.

My credit score is around 750, and I got pre-approved for 330K at 4.5% back in May.

Once you are approved and have the license you are home free. 

If they were approved by a bank to buy an $850k home last year, now selling that home for a gain, I know them and have positive experiences and believe they have solid character, we were neighbors for a while, their young girls are very sweet (and occasionally very helpful with yard work) ...why would another background check be required?

I would like to touch base with an engineer type for some quick guidance and approval (obviously at a cost).

If it is zoned SFR presently, you can always apply for a multifamily zone, it just has to go to hearing and get approved.

Probably not worth going the HELOC route, if you even get approved for it. 

Do not rely on it for legal advice.

And if I were in your shoes, I would want to be a lien holder because of the legal ramifications that can be enforced as one.