The roof and attic are the best parts of the house, 0 problems.Main line, laundry line, kitchen line are actively leaking.

Right now I think your best bet is to call your insurance and go through them.

The example scenario would be if I bought a $1M property, the bank is in first position and covers 800k of the property cost, the seller agrees to cover cost of down payment and covers 200k of the property cost.Let's say we can no longer make payments on the property and it's foreclosed on.

Quality over speed saves time and money in the long run.

Most investors follow the 70% rule of thumb (ARV x 70% - Rehab cost = offer price). 

The seller wants to give a credit for repairs so we can close early but the closing costs are already covered.

The house still appraised for over sale price but I was wondering if this could be used as a negotiation moment or am I SOL? 

The cherry on top is that one of the tenants is choosing not to renew as of 10/31.

One, almost half of the front wall of the house and the garage was eaten away by termites..... 

I have tried going through the conventional route of HELOC and Home Equity Loan for my primary residence.