You can carry on forward and hope it doesn't come back to bite you sometime in the future.

My interest in REI is to at least supplement my retirement pension in the future and to have something of my own to grow. 

I came to Australia about 7 years ago from South America looking for a future and survival of my existence (literally), since Australia's market has become a big financial bubble quite impossible to penetrate, I decided it was best to get into USA since I loved this country when I just a child, I always have.

I will be screening all future tenants using the amazing advice on this forum so I can minimize the chances of something like this happening again.

You don't want an owner taking away time and energy from other owners who would have committed to you as a buyer.It's a  cat and mouse game and sometimes you win and sometimes you lose but there are more properties in the future on the market and off the market to consider.

However, splitting cash flow & potential future equity might make a deal this small not worth it other than the experience.

Not sustainable. 

Since I'm getting close to my 10 loan limit, I wanted to see if a future HELOC I get is considered a loan that goes against my 10 loan limit.

I was not sure I should take some extra income now but pay the tax or just simply leave it for the future investment. 

Under that structure you would be regulated by the SEC and the whole deal should be structured accordingly.If you are planning on having some level of active involvement in the operations and not completely relying on someone (The GP in this case) to manage your capital with the expectation of future financial return on your invested capital then you can go ahead and just go the "partnership" route.