If not, then it's a standard 10%/20% down and figure those payments. 

That being said standard association master policy does not exclude coverage for water damage that results from poor craftsmanship of a contractor under any circumstance .

Would you pay off the heloc or just make the standard payment and keep all the cash for additional purchases?

Rehab them up to Market standards and/or improve the operation.  

Is this a red flag in regards to the plumbing systems or is this standard?!

That being said, you can get an idea of what standard documents look like for conventional loans here: https://www.fanniemae.com/singlefamily/security-instruments

INSPECTIONSIn the standard California Association of Realtors lease that most CA landlords use,  there is a clause that allows for entry w/ 24 hour notification, including to inspect the unit for maintenance purposes.

Either way in that situation you make your goal.I had a lender one time tell me they underwrite 50% opex regardless of sellers numbers because if they take it back from the borrower because of default they will not be managing themselves and they also could not run it as efficiently as the previous owner who sold it to their borrower.Underwrite conservatively for standard industry practices.I don't buy anything on the if the (everything goes right) scenario because if it doesn't you are up the creek.   

Keep an eye on the neighborhoods though.. some are pretty 'rough' by some standards.. 

Reach out to your broker contacts and your network and ask for lender referrals that play in the apartment space.Your pre-screen interview calls could includ asking them if they do apartment lending, what their typical loan size range is, what class of property do they like, standard loan terms (amortization, fixed rate period, interest rate range, LTV, and any other product knowledge you would like).