I recently came across a 2018 mortgage record involving someone getting a mortgage for $700,000; the collateral they gave were two residential properties (old manufactured homes) not worth even remotely close to that (about 60k each). 

We formed a new LLC and utilized the equity in one of my personal rental properties to post as collateral with the bank to obtain the loan.

They might look at a deal like this, otherwise you need to reach out to your network and JV with a PML to bring the down payment and be in 2nd position, OR, carry a note against that other investment property as collateral. 

Also can I turn around and use the the new properties as collateral for more HELOCs?

.* 3/1 ARM (3 years fixed, then begins to float)* 80% LTV* 4.99% initial note rate for 3 years* 30 years maturity and amort term* No points or bank fees (underwriting,processing, and the like), though they're thinking of putting half point charge on* 2% annual limit on rate change* 6% lifetime limit on rate change (thus life cap is 10.99%)* No "floor rate" during the floating period of the loan* LLC titling is OK, w/ personal guaranty* Will escrow for rehab and build into loan, supported by a "subject to" appraisal on front end* Blanket loans are fine (multiple properties collateralizing one note)* No cash out seasoning period - can buy for cash, then refinance next day for 80% of purchase+rehab* 12 mths title seasoning needed to use new appraisal on a cash out refinance* No limit on # of loans with the bank.

But to answer your question, it should be fairly easy to get a short term (like 1 year) loan to be able to pay off Citizens, collateralized by that property or by others.

Ron if you have assets (other real estate) you can cross collateralize or you have a bunch of cash and can escrow big reserves then they might let you go no money down if you have a track record with them.If not some lender will let the owners hold a 10% second up to a 15% second but you would need 10% down or a partner with that.You will also need 10k or so for closing costs and inspections etc. as well as reserves.You will need to ASK what numbers your lender will base averages on for lending purposes??

Securities are defined by the Securities Act of 1933http://www.sec.gov/about/laws/sa33.pdfThe definition is:The term ‘‘security’’ means any note, stock, treasury stock, security future, security-based swap, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a ‘‘security’’, or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoingSo, are loans securities?

A distressed property, one that will not meet normal inspections or collateral requirements of lenders place the property in a distressed situation,it can't easily be sold unless repairs are made, again, such properties won't meet the definition of market value due to the lack of financing.

If this is the case, the home you live in will be the collateral for the loan and therefore i don't think anyone will care if you own the investment property in an LLC or not.