Look at the breakin as a separate issue.

You'll need to be more equipped, you won't be able to handle a capex and tenant issue in the first 12-15 months. 

It was a large flip project (original budget was $110k renovation costs) that went way over the planned rehab time as I had many issues with the GC I used.

I have plenty of equity in the home so that should not be an issue, but I am a bit confused on where to search for investment property HELOCs.

They mentioned the wife has medical issues and this is causing stress and if she ends up in the hospital due to stress we will be hearing from their lawyers. 

Maybe he can purchase equity too instead of just issuing the loan, or both.

How do I find an insurer that will issue a policy for a rental?

It will cost more, but the last thing you want to do it buy a property and the pipes burst week one and you don't get any insurance money to fix the issue.

We are a investor only General Contracting company, on top of being RE Investors and Landlords ourselves which allows us to specialize in maximizing our clients returns through different strategies. 50% of our current client load is out of state so we are very much set up to communicate and run financials through our Project management software.

He handles all repairs, turnovers, guest issues, etc.