If you are concerned about a cracked cooktop, you can always require a security deposit. 

Lots of great resources and information on here.I wholesale in Phoenix and could also recommend some contractors as well (Although I would recommend getting bids from several different contractors to familiarize yourself with price points).As far as hard money is concerned, Boomerang Capital / CapFund1 / Merchants / Clear Mortgage are all great reputable lenders in the area.Feel free to PM me if you ever want to chat

I had concerns if I am even going to deal with the people who actually have the deed.

This is the response that was communicated by the local office:I understand your concern.

No short cuts. 

I understand the bank being concerned if they deem the HELOC is being used on a speculative investment that may be at risk during a downturn such as a spec home or flip, but do you think they pose the same risk if he were to use it to buy lower end rentals below market value with equity most likely already built into the deal?

I'm leaning toward pursuing LLC formation (with advice of both attorney and CPA...and spouse) but am concerned about implications for lending. 

If your concerns with leverage is hitting bumps then you are not planning properly.

Dug and cut egress window in to basement and completely finished out the bsmt Lessons learned?

What would be your biggest concern in dealing with these customers?