Refinancing an existing mortgage with a HELOC ?

[Joe Hughes]

I'm having a lapse in memory this morning, so I am reaching out with a simple question;   

How should I best approach this scenario?

I own a SFR that I was originally planning on flipping. I ended up moving my family into the house and we should be here for at least 3-4 years. I used my PML partner to originally fund the acquisition and rehab. He is now wanting to cash out on this deal. It has a realistic ARV of $195,000 and the payoff balance to my PML is $135,000. (It also needs some foundation repairs done for about $25,000). I would like to get a HELOC for $156,000 (80% of ARV). That would cash out my investor and pay for the foundation repairs. (I'm not worried if the numbers don't line up exactly, as I can fund the difference with cash)

 My questions are:

~Do lenders only look at the current ARV, or is there such a thing as a projected ARV (for when the foundation repairs are completed?)

~I am only wanting to do an interest only HELOC, with a balloon payment in roughly 5 years. Is that feasible ?

~Is this a good strategy ? Would you recommend something different ?

Thanks in advance for your insight and advice