Fortunately, even though I'm a newbie still in setup mode (working through renovations on a value added property) I'm already starting to recognize the right answers before reading the responses, thanks in big part to many of you.

If you added in the cash you should have to protect against contingencies, the actual return goes down (or the risk sykrockets, your choice)- If the $300K properties cashflow, definitely a better bet. 

Then they won't need an upfront payment for work they haven't provided yet.Also, get a signed contract, copy of the drivers license, contractor's license and be added to their liability insurance.

If you DM me your email address I'll get you added to our events email list.Regarding the options you listed, I think #1 is best.

Added a bathroom and remodeled existing.Opened kitchen to diningNew roof, driveway, windows and mechanicalsRefreshed landscaping, hardwood floors and paintWhat was the outcome?

Below that is a parlor floor, which has the highest ceiling in the building and this floor is connected to the ground floor via an interior staircase which we added doors to both ends to break up the lower duplex into two separate living areas.  

In this case though, it makes it very tough to keep the current property cash flowing if I pull the money out through the HELOC though (while it's not directly added to the mortgage, it all still washes out into much larger monthly payments) though, so I am very leary!

Later you mentioned after prorations you had to come with 6% cash, what other items on the settlement statement added up to 4% lowered your DP to 6%? 

The guest contacted me via our Zillow ad prior to the showing and was apprehensive.

Maybe adding a parent a lease co-signer (and payer) might help.