I think there’s so big money in the area buying them up (one last week went under contract in one day).I’m starting to turn my attention to units with ADUs or in-law suites.

Des Moines seems to have two options  - brand new construction or needs a lot of work in a not ideal neighborhood. 

In real estate, we need to learn and pivot quickly, so take note of what you learned when you chose this tenant that was not well suited for you and make sure to not make the same mistakes with the next one.  

Obviously negative cash flow is not ideal, but it may not also be a disaster if you can cover it until you're able to sell.

It just depends on what loan suites you best.So the BRRRR method is designed to limit your out of pocket costs when buying an investment property.  

So going with a conventional with 3%-5% would be ideal?

For my first investment, debating staying at this house, looking for ideal BRRRR property, and continuing that pattern, or a quasi-house hacking approach. 

File a suit against the  General contractor .

So with that considered should I do the HELOC route or would that cash out refi make more sense to better suite a cash flow rental income strategy? 

Ideally we would get an attorney to draft up the specifics of our arrangement but things that we are unclear about include things like, who should take out the mortgage (both names v.s. the one who can get the better offer), what documentation is essential i.e. equality/partnership agreement.