A 10% increase in value probably isn’t worthwhile to refinance (unless you’ve paid down some of the mortgage too).

There could be a lot of different things that can happen that could delay it and I have found there are often delays; rarely do these types of things happen ahead of schedule versus the chance of them being behind.   

One technique for finding deals that intrigues me is looking up NODs (Notices of Default) in the public records and then reaching out to the property owners (probably via postal mail) to see if they are interested in selling.It seems like there's a decent chance to find a highly motivated seller and perhaps a very good deal using this method.I am wondering if anyone in the forums has used (or attempted) this technique, and if so, what sort of results you've seen.

Would you prefer an ongoing 20% ROI, while not expecting any increase in the value of your original outlay, or, would you settle for an ongoing 10% ROI, while counting on (uncertain) future appreciation that might compensate you for the other 10% that you could have been getting from day one?

Increase earnest money.

I take their financials into consideration when determining if I can find ways to reduce operating expenses and increase my bottom line.

They are currently paying $450 a month in rent and have not received an increase in their history. 

With rates moving higher, it is likely that your rate will increase in the future. 

There's a very good chance it's coming.

This leads me to believe the mortgage is the better option. exactly. confirm the terms before you lock either one down, but I've been in lending my whole career, these things are fairly standard. if you take the heloc your payments will obliterate any chance of cash flow. mortgage is better suited for that