I'm looking at a $2000 repair for the ceiling replacment and another $500 for the HVAC repairs bringing the total to $2500. 

The person obviously can’t afford to stay there and should be persuaded to leave .

Total rent would be around 1800/months if both units were rented out.

I used Amplify Credit Union to obtain my HELOC and it was a quick and easy process...about 2-3 weeks total.

They can write up to 30 total units (a 4 family = 4 units) and they can cover apartment buildings. 

As for reserves, I like to keep 6 months worth of TOTAL bills, capex, utilities etc per property in savings.  

Obviously the goal with the 203k is to find a great deal so that the ARV really gains us some equity to keep the train moving.

My original point is and was, there are no requirements to accept a senior lien offer less than total debt.

I had to go with the sellers to a city council meeting for the conditional use permit, and about 10 minutes on the phone when I was going for the extention, for a total of about an hour and a half, and it has been a great investment.

@Zack Karp The lenders I've communicated with said that since my IBR payment is $0, they'd have to use 1% of the total amount.