As you sell off lots the loan will be paid down on a lender predetermined percentage basis and will be released from the collateral.

Trying to finance land in the northern counties without some collateral substitution is, IMO, a waste of time.

I worry that if we experience another market bubble like in 2008, the bank will assume that my property isn't worth the prior appraisal, and will try to discontinue the draw period in fear of not having enough collateral during a foreclosure. 

Had to discover the house was collateral for a large blanket mortgage via an O&E title search I ordered up as usual.

Like an interest-only bank loan, they pay only the interest until the debt comes due (in this case mostly in 2025, so they have 7 years left to hold bond-investor money).Since the properties are bought outright with these funds, the REIT has a choice to make when payment comes due: issue new bond debt to pay off the old debt, or sell the property which has been collateralized against it.

This means while you can certainly borrow money from the family you probably won't be able to use the property as collateral. 

Do I need collateral?

I'm not saying your scenario doesn't work, I'm just saying there is a LOT more to it than just buying it with a HELOC, fixing it, and cashing out.If the OP however is buying the property through other means like business lines of credit so that it is a cash purchase for all intents and purposes, yeah, buy it, fix it and then refinance it or sell it to recoup the cash invested, provided they qualify for whatever loan it is they are trying to do (Income, collateral, etc.).

But with a personal guarantee, the process is much quicker if you have at least a 680. 0% interest for 6-18 months, stated income, and no collateral.

You need a loan not secured by collateral or something based on the new property.