I've been buying SFH's out of state all cash as long term hold rentals.  

Those willing to go beyond that could be good partners for real estate investors.Traditional banks/Local Banks and non-bank lenders - If they are a portfolio lender, meaning they actually hold on to the loan and don't just collect your payment, then they have the ability to be flexible.

The down fall is a Heloc can "Never" be used as an asset or for PITI reserves required when buying a new Primary or investment property.A heloc can also cause major issues with credit and one slight hiccup or missed payment the bank or lender who is holding the Heloc can close or reduce your line of credit.

How long are you expecting to hold and do you have the money to purchase in San Diego?

Now most of the time we don't see househackers/investors use in-house or portfolio loans from banks because sometimes they have more restrictive guidelines and higher fees for holding it which might cause the numbers not to work or for the deal not to go through entirely. 

I've seen some lenders place limits on the number of loans a borrower can hold, but most don't.

Will you use the HELOC as a short-term bridge, or plan to hold it longer?

. :) A zoning change can take up to 6 months, approval isn't guaranteed (despite Aldermanic support), and potentially cost a lot of money (architectural site / floor plans & dimensioned elevations, zoning attorney, holding costs, etc.) 

So it’s not a house you’d should hold with your own money.

My guess is that their mentors are similar, no barrier to entry, and no major organization or entity that holds them accountable for ethics.