You mentioned working with a mortgage broker, have they not given you any options outside of the HELOC? 

I would start networking with a loan originator that can show you both options perhaps.Who will rehab the home? 

I'm of course bias because I invest here and I'm an agent here, but there are plenty of options for great properties in the $650K range in Reno.

https://www.biggerpockets.com/blog/what-documents-do-you-nee...BRRRR Loans: What Are the Options, and How Do DSCR Loans Stack Up?

Option 1: buy a duplex or small multi-family and house hack.

What are the options here?

In addition, you have the option for material.

It's not really optional, you essentially have to claim it, and this is another item where you have to be sure to correctly enter the past depreciation amounts from the previous tax return.  

I wanted to create options for my family.

There are a lot of factors to consider, from finding the right property to managing tenants.That's why buying new construction as a rental investment is the best option for out-of-state investors.