To only invest $5k into the deal with those returns is fantastic. 

It's a super affordable real estate market where you can still find deals that hit the 1% rule and positive cash flow/great cap rates.

My idea for wanting the HELOC is to have access to funds for future deals.  

With myself as an operator I would offer the following: underwriting the deals, a detailed scope of work, a detailed material list, the labor, and the management.  

Don't cut special deals to help a friend or act like a big shot.

Even if you get a great deal that is 20% below market, appraisers will typically be anchored by the last sale price and you may be stuck not being able to pull out as much cash as you need to pay off the HELOC.

Hey @Tim Bergstrom, not sure if you've made any progress on this - we're operating in nearby Lexington and have vetted a few deals in the Louisville market.  

I took a 5 year hiatus from BP but despite all of the deals, ups and downs I found my way back. 

With on market deals like this, there are two scenarios: 1) you see something that no one else sees OR 2) everyone else sees something you don't

So I do deal with one person or at least have that person I can email or call.