I'd like to use this to make an "all-cash" offer on a SFR, and then convert that to a conventional mortgage to pay off the HELOC.  

Most commercial lenders do not require any seasoning for that entity which means that you can create an LLC and use that entity to purchase the property immediately as long as you have the proper documents.

The guru your son is learning this technique from is likely not telling your son that the deal will almost certainly encourage your son to get an "off-market" deal from a "wholesaler" who is unlikely to properly disclose the details of the property or encourage an inspection. 

Quote from @Nicholas Dillon: I read somewhere that you can request to have your mortgage insurance dropped once your Loan to Value reaches 80%.

For the community development dept, you'll need proper plans (architect), site survey, permits, etc. when you're ready. 

I just completed my 20 hour course for my Illinois Mortgage Lending License and the final step is taking the state exam.

So, there must be a way to do this properly, as they must be doing it.

While living with tenants can pose challenges like privacy concerns and tenant relations, clear boundaries, professional management, and proper tenant screening will help you succeed.

I am a licensed realtor based in Atlanta, Georgia, and I am currently working on obtaining my mortgage origination license.

Quote from @Jed Butikofer: Unfortunately, it takes money to make money.With high prices and high mortgage rates, cash flow is difficult to find and we may not see a return to the 2018 market for a while.