For a tenant who clearly doesn't "read between the lines" well, I would anticipate she would read this as more leverage over me than it realistically is.

I was interested in this deal because of the cash flow (already rented out) and the fact that the property had an attached vacant lot that I can build another property on down the line.

Maybe the original note referenced the maximum amount of the line of credit when it was taken out.

It's a border line scam IMO, but I as relatively new so it would be good to hear the other side of the argument. 

As a newbie looking to do my first BRRRR or Fix & Flip, I'm realizing I'm not sure what the proper protocol is with regards to lining up cash for the deal first (hard money) vs getting a deal under contract first, then securing hard money.

but banks can certainly do it on non owner occ. they draw a big red line around areas of foreclosure clusters and wont lend there.

Additionally, when I look at this property on-line, it doesn't appear to need much work.

With no one properly trained and no one tied to the bottom line of the company, the staff generally stopped working and caring... with the exception of the inflated work orders to compensate for the uncollected rents.

sorry Derek for the late replyI'm need a 1 2 3 step in lining  up my wholesale operation and a guide to follow.

If so then you have what might be a golden opportunity to give yourself some runway to develop your strategy for real estate  before having to jump into the tight time lines of the 1031.