These will eat into any cash flow/profits you expect to make. 

Mine concern with this deal is how skinny the profit margin is.  190k x .65 $123,500 should be purchase price before deducting for rehab costs. 

Try looking at:The Best Types of Markets for Profitable Turnkey Properties

This might be fantastical to take on so I'm very interested in your thoughts.Brief BackgroundI am looking for advice to utilize creative financing for the transition of a huge single family Victorian into a multifamily to hold.

This implies that an RE investor in San Diego must find other means to profit for a purchase of an SFR to make sense. 

As seen in the comments above, the confrontation on this issue isn't always pleasant, but it is not impossible to have a successful transition. 

I never want anyone to get to the closing table and be surprised that I made a profit on their home. 

Repay the HELOC, bank any profit over and above that, rinse, repeat.

We're trying to decide whether to hang onto it, become landlords and use the equity to purchase our next place or just sell, take the profit and focus on purchasing another fixer-upper in an area we foresee appreciation.

For instance, Investing in Phoenix is very profitable right now as is other parts of the country.