There are syndication/crowdfunding funds currently being launched now which intend to take over deals from syndicators/operators (where those same owners would otherwise have to turn the keys over to the bank).Generally the ones in trouble are those that structured too aggressively (high debt, floating rate, etc).

As you pay off the debt are you comfortable with $4M equity exposure within a single LLC?

As someone else mentioned, what I've seen a lot of in the past six months is deals that don't have the rental income to service the debt and borrowers with marginal credit.

That amount and the debt pay down that your tenants are making for you should also be added to cash flow for your ROE calculation. 

@Michelle SharkoAnswering questions in step by step fashion:- Is it a good thing to do or not is a personal finance decision and it depends on the person asking it, their risk tolerance which in part has to do with how this HELOC or line of credit works and how your personality fares relative to taking on new debt (a person more adverse to debt might have sufficient savings and temperament to pay down/back the debt versus a financially liberal person might get in over their skii's as).

Typically lenders for non recourse require the borrower to have a net worth that is equal or greater to the outstanding loan blance, have at least 1 year reserves for debt service and experience and or a track record.

Are you debt averse or want to take on more debt?

You are required to file a complete and accurate return, which means reporting the income that you earned along with atleast the direct expenses that you incurred on your rental.There are two comflicting forces - Your tax accountant wants to be aggressive with deductions because it will entitle you to paying less taxes(now or in the future).Your lender wants to see as much income as that will increase your Debt to Income Ratio(DTI).The good thing is that you can speak with your lender about 'one time expenses', that were only incurred in that year and are not reoccuring. 

Quote from @Tim Johnson: Has anyone seen an example of a lender combining debt with equity on a real estate deal?

I always tell my clients to put a reminder on their phone to go off monthly to ensure they pay off all debts like this that can cause them to have higher credit scores.