Unfortunately, real estate is often messy so I can't say I'm too surprised, so I'll do what I can to talk through each thing.The rate float is not uncommon, as we've seen the 10 year treasury fluctuate a bit the last month or so, so I wouldn't be surprised if they had originally quoted something (guessing low 7s?)

But the effort and cost to maintain 40 LLC’s would outweigh the benefit of a low probability risk. 

The group the will be hurt the most is buyers, especially low income buyers.

We live in an area with relatively low prices.

The problem is that the project is over budget: I'm going to end up needing $300k rehab funds, and I don't have the additional $100k to float until refinance. 

i agree. if you can raise your ADR and make the same amount of money with less visits, thats also less wear and tear on the property. 30% occupancy seems low though, unless that hits what your goals are and your renting season small.

Hi All,I took a HELOC for ~$60k on our primary residence to fund a renovation on a rental property.

We have quoted some DSCR’s lately in the low 7’s when credit was good! 

The person I am working with is a local and also mentioned that it is a desirable location with low crime. 

Depending on your amount you may want to consider a debt fund too as its less work and your money is deployed/paying you interest so you do not have to keep finding deal after deal. just some food for thought