Banks will usually only take 2nd on something like a HELOC on a primary residence or a credit line against the equity in a property. 

I used an additional 22K from a HELOC on my primary residence for the down and rehab, so that's a total of about 45K for down and rehab for 2 houses.

We would like to take a HELOC out on the property to continue investing and purchase an STR.

Since you don't have a mortgage anymore that may be why the bank wont help but like this posts says talk to a home based bank "they are more flexible" and they should give you a line of credit on the home.https://www.biggerpockets.com/forums/50/topics/72178-heloc-against-rental-property

Can or should we get a heloc as a down?

1. 60K2.2-5 mos3.definetly more competition on properties.funding ok at this stage4.from loc not heloc though5.possibly -depends on deal6.interest only7.2 done -got first house in july8.need to turn them faster so I can do more deals number 8 makes me sound alittle like an addict.

If the forgiven debt was a HELOC used to buy nice vacations and expensive toys, then its still taxable.

I am trying (the key word is trying) to refi my HELOC, while at the same time doing a half-azzed effort to pay it down (why pay it down when I'm making more with my money?)

Take a look at how just two percentage points can change your payment: Loan $165,000 Rate: 3.5% Term: 30 years PAYMENT: $740.92Loan $165,000 Rate: 4.0% Term: 30 years PAYMENT: $787.74Loan $165,000 Rate: 5.5% Term: 30 years PAYMENT: $936.85You would be better off locking in a rate on a 15 or 30 year mortgage rather than having the worries that as interest rates increase your return decreases.To see if a HELOC will be better, make sure you calculate how much interest your will pay on this loan (higher interest rate + fluctuating) over lets say 5 years compared with a traditional 15 or 30 year mortgage.

Given this experience, I am discouraged about further out of state investments, but as I am in Southern California, investing locally is out of the question.I do have some capital (around 200K and still steadily growing -- probably twice that by year end, plus access to more in HELOC funds) and don't want to give up on the REI game just yet.