There are 2nd position mortgages for rental properties 1-4 units.

If it is tied to the home, you have a few options:1) include electricity in the rent (down side with that is tenants may be less diligent with electricity use and increase the bill)2) have the tenant pay it and include a copy of the statement every 1-2 months to show that it is paid in full.3) have the bill in your name and send a copy to the tenant each month (or whatever the billing cycle is) and they can add the balance to their rent each month. 

I have not done a lot of research yet, but I imagine that others in town are begining to wonder about their options as well.Being creative and building are the parts that I'm passionate about, so I'm not interested in cookie cutter designs or paying others to do what I consider to be the fun part.

I  am looking for positive cash flow with this investment,  locations with a propensity to increase in value & friendly landlord laws. 

Lots of options!

there are several things to consider here when considering the two, although a great option when you are in this position could be to purchase the building, make any necessary improvements get your business up and running and get your business set up on a lease in the building. 

Your HELOC will move from 2nd position to first and they can foreclose just as easily a your original mortgage.

If you are strapped on cash and have the ability to save a lot of money in the near future, a fixxer upper might be a good option.

My question is if i purchase the property as seller finance and there is a promissory note what are my options for loans on the new construction?

Contact me and I can walk you through some other details and maybe look at some other options.