Typically the HELOC/Line of credit is set up as a fixed term interest only where you pay a minimum IO payment until it recasts/matures. 

Apple, AT&T, Walmart etc. 

If something seems too good to be true....i.e. a much lower price, something is probably missing from the bid or is not apples to apples.  

NOTE: When getting bids, make sure they are bidding the same types of appliances, same quality cabinets, finishes, etc. so that you are comparing apples to apples!

Not an apples to apples comparison to my ADU opportunity but that is the alternative investment I have been considering.The info on Beaumont Wilshire was just to paint a picture of where I'm located and the general market conditions here.  

He then received the same $104,500 of principal back ( worth $80,000 today) and has $20,000 in cash left ($100,000 sale price less the $80,000 note purchase price) or the same $14,500 more than if he provides owner financing.Always compare apples to apples.  

With prices here, most CA borrowers don't have this problem, even now in the Inland Empire and Apple Valley.Rather than rewrite it or quote, you might check out this related thread which outlines many of the questions you could ask an HML and a few ways to ensure they are honest.  

And it certainly is apples to oranges from SFR's... but the concept is the same you have 1st position collateral your in the business your local commercial bank is in the business of funding their community investors..

If you are comparing your home to your neighbors, apple to apple in terms of same sq ft, layout, style, etc. - then I would imagine you'd get more than $280K with nice upgrades...

Go to any open houses in the area, and see exactly what the product is that they're offering, materials used in finishes, etc. so that you can compare apples to apples.