HELOCs are ARMs but you only pay interest on the amount you have drawn, cash out refinances can be a 30YF but you pay interest on the full amount you pull out starting on day 1.

Come armed with a list of questions.

right now I'm at 3.25% on my original mortgage, and I have 1 year left until the ARM goes up.

1st Lien - $125,500 - 6.25% - Montly payment - $771.90Sale Price - $175,000 - $1000 contribution = $174,000Down payment - 10%2nd Lien (our finance) - $157, 500  - Interest rate - $9.95 , 8/1/1 ARM - 20 year AmortizationMonthly  Payment - $1425.66, Escrow paid by BorrowerCashflow: $653 (before tax) - That's damn good cash flow.

Make sure it explicitly explains the process for termination if you are unhappy with their services, but especially if they violate the terms of your agreement.3.

"At arms reach" is the terminology commonly used.  

Make sure it explicitly explains the process for termination if you are unhappy with their services, but especially if they violate the terms of your agreement.3.

But, he will charge you an arm and a leg in points and interest rate.How good is this deal?

What you have on the table for the structure sounds pretty good, as most of my clients who do this strategy, usually do a '2-step' process with different lenders - take down property/rehab w/ fix/flip type loan (higher interest I/O basis, lending on some type of ARV) and then they refinance with a longer term portfolio/alternative money (some type of ARM, lower rates). 

Make sure it explicitly explains the process for termination if you are unhappy with their services, but especially if they violate the terms of your agreement.3.