If it is borrowed, then yes, making your terms adjustable so that you maintain your margin or spread is appropriate.

Besides...I'm not sure I could get what I need from a refi cash-out to cover the mortgage (1st lien) and the HELCO (2nd lien).Details of the financing below: Purchase price: $255KMortgage: 3.0% for 30 yearsHELOC: 5% (as of today) for an 10 year interest only paymentRehab costs: $80KMonthly mortgage/taxes/insurance is: $2395HELOC is : $433 (as of today)I have the opportunity to lock in the HELOC rate 3 times in the life of the Loan, but it would up my expenses.Here are my options with the HELOC:1) Interest only – option30 year calculation (360 months)Use the current prime rate, add in your margin 1.5 to get the rate, and only look at your Interest portion to determine your minimum payment2) Rate lock - optionWill be 20 years (240 months) of principal and interest paymentsRate = current prime rate, + your margin 1.5 + HELOC current lock in margin .75Please offer your thoughts as I'm sure I should lock in at whatever the interest rate is now, but it would up my HELOC monthly payment to $1050 for 20 years.Thank you

Overall a super good episode; had a guy on named James Dainard who said (if I recall) that in this uncertain market he ensures that his deals have 20% more margin on purchase price before assessing flip profitability. 

You get to keep the margin on the interest and any points/fees you charge.

I am noticing margins are getting tighter and tighter from wholesalers for sure.

And congrats on your house hack, Flipping in is pretty hard rn tbh, with margins compressed and labor and materials through the roof.

We need a margin of safety in these deals that can account for these types of events.

The margins will get squeezed in the next few years as more money pours into the space, but it's still a great time to acquire amazing properties across the country with incredible cashflow. 

There is a lot of unforeseen issues that will likely drive your cost about your budget and drastically reduce your profit margin/equity in the property.BTW, I like your positive energy to get this done.Goodluck and update us on your progress. 

A smaller house sales market will push more people into rentals, which will drive those prices up and push the people on the margins out altogether.