HELOCs tend to be limited to 90% at the moment.

Kurt- Is the 2nd an HELOC or cash-out refi?

One property has a conventional mortgage, the other a HELOC, with 2 different banks.

The only time you can use borrowed money is if the money is from a HELOC or home loan.

Next, after we get the mortgage will we be able to get a HELOC on this property so that we will be able to do more deals like this?

If its FHA they can get all the money from gift, if its conventional I think they need 5% of it to be thier own funds.If its an investor loan then borrower needs to have all funds in cash of thier own money with 60 day seasoning or proof of where the funds came from- Cannot be from a credit card, loan from friend.Can be from heloc, savings, 401k.

All of the stories I'm hearing are of people that refinanced their home or used a HELOC to get started on their first property.  

Would it be a good idea to use a HELOC for either the purchase or the rehab?

It's a rock and a hard place because we have one rental already (actually going to get a HELOC on it for part of our start-up cash) and need to build the capital to buy more and this is exactly the kind of deal we want to start with once we get some more cash but if we get it now it may end us before we really get started. 

Any suggestions on the best banks to get a HELOC?