And since I dont have much money and am rebuilding credit, this seemed like the best fit.

As an aside: Contact your credit card company and tell them what happened and most likely you'll get a 'charge back'.

Buying the tax certificate gives you No advantage in eventually owning the property.....it would later have to go to a Public tax deed auction, after you paid off All of the other outstanding certificates, probably 10 times your initial verticals purchase amount, then you’re still bidding against everyone else, less the credit for what you already have out of pocket.

I have already used 0% 15 month APR credit cards and cash for work on the house remodel (yes, I have a plan to pay them off).I was thinking of getting a HELOC for the 60k loan, but my DTI is too high ( and my parents have no income for co-signing).  

I'm continuing to D4D in my farm area and one vacant property was foreclosed by one of the local credit unions about 4 months ago. 

You having a second lien of $200k has no effect on bidding or paying for your bid price.....no, you don’t get credit for it in any way.

The seller will be credited for any overpayment and you will pay whatever is due to the city to keep the taxes current.

I have a good credit score, but my credit is still new.

Using a home equity line of credit to find the deal ?

I have a LOC ( line of credit ) where I am able to pay cash for my purchase - we will use 50k as an example.