So, essentially, you need a property to attribute these expenses to, and without one you don't have anything to deduct against.As others have suggested, you could always consult your tax professional for more specific advise based on your individual situation.

You should question a CPA (I am not a CPA) and get an opinion on how to classify the different elements.

Essentially, you'd be paying cash for an investment property with the HELOC (assuming you have enough of a line of credit) and could then use Delayed Financing to repay the HELOC and have it available for the next opportunity.

You will have resale costs of course but essentially 1.8 million in 2 years from cap rate compression on the cycle.

What truly non essentials are you spending on?

Essentially I flipped a house.

Essentially a 1-yr balloon for you will mean a payment of $140,000 - $14,000 = $126,000 due in 12 months.  

Sounds complicated...but it's worse than that...it sucks...The owner has already proven he can't make the payments...why would you as the investor want to lease purchase to someone that has essentially told you..I can't make the payments...Maybe I misunderstood your post. 

If I would have closed on May 2, my first mortgage payment would not be due until July (vs June for May 1), which essentially is like getting an extra month of cash flow for free.

Either route and the investors personal circumstances may often have a different tax consequence that might essentially determine which route or business model the investor decides to utilize.