Almost nothing beats having a cushion of equity to soften any recession or compensate for costs/capex.  

If you have other assets with equity you can use HELOC for the initial purchase/rehab funds and traditional financing for the final refinance phase.Note, talk to your banker to find out their criteria for cash out refi...  

What is my position here?

Not worth the risk in my opinion.If you're not in the position to lose that money down and be stuck paying a mortgage and carrying costs, don't do it.

To all the investors with experience, what would you do if you were in my position?

I just pulled out a little equity so I would have some capital if needed.

I am in the middle class and am using the depreciation deduction (and someday 1031) to better my family's financial position.  

Don't let the money languish earning nothing when you can pull it all out at a cost of next to nothing.Better yet sell the property and find cash flow positive properties to invest in.

Hopefully they have another deal in the pipeline to pay their bills again next month..This notion that all agents are out there crushing it and screwing people out of profit or equity return has got to stop.

Hi @Ashton Sharp,It's almost always a good idea to get out of FHA financing as soon as the equity is there.