Then pay off the line of credit and be ready to do it again on the next deal. 

She lied on her application, committed fraud (fake credit report), etc. 

Hi BP,I recently talked with an investor who buys houses for people looking to do a rent to own and collects 10-15% down, charges market rent (none is credited towards the purchase price), and marks it up about 15-25k depending on the price he bought it at.

I work a full time job and a part time job and have good credit.

Only really need one deal some require more. 3.5% origination fee, 9 to 12 points also depends on credit.

Massachusetts still has a 30% credit on place as well as a State $1000 credit.

With 20% down you should absolutely be able to find a 30 year fixed rate....although, I don't know your financial/credit situation...but getting a 30 year fixed rate, especially early on, will help you qualify for more deals in the future. 

Consequently, we have a harder time finding renters in those areas as we apply our same pre-qualifications standards to those units (Income 3x or more the rent; no previous evictions; avg. credit score of 600 or better).

You won the eviction and got a judgment which will ruin his credit.

I see offers all of the time from wholesalers in MN offering terrible deals that could possibly get an inexperienced investor in a bad situation.