Effective communication is the key to any PM/Investor relationship.

.”, any damages you might win likely will be strictly work paid for but not done, assuming this was very clear in your contract....you likely won’t be able to collect for any indirect costs....carrying costs, time, opportunity, lost rent, etc. 

Would it be the most cost effective approach?

@Nicole Richards Many of the answers you are looking for can be found here: How to Effectively Conduct Joint Venture Agreements as a Real Estate Investor596231-how-do-i-properly-construct-a-purchase-with-a-partnership591376-create-an-llc-for-first-partnership-best-way-to-do-so526244-taking-on-partner-s-and-limiting-our-liabilitesGood luck!

Now for the question: in the new tax law, effective Jan 1, 2018, I understand changes have gone into effect regarding the ability to deduct the interest of HELOCs.

Also, in the event there is damage to the premises that the current owner is not aware of, how do I know what the condition of the property was prior to the tenants moving in or if they are trying to recoup their security deposit by claiming that the damage was there prior to the tenants moving in?

I have many offers on the property @ $1600 and $1500 respectively that i'm sifting through.assuming they don't all fall through i'm in effectively for no money out of pocket and $3100 in cashflow - the mortgage which should be in the 2k range after the refinance.  

One time a tenant pried the lock off the meter base and damaged the meter base so badly the house got condemned.

One more thing to consider with a HELOC that could have effect on the deal you are trying to use it for.

Foundation is solid, termite damage isn't too bad.