home building finance option?

Hi gut check needed here:

I have a mortgage on primary home i own, co-own a second home with partner (no mortgage) and will build a third house with partner from scratch. Not sure whether we will sell the third home or rent for a while and take advantage of 1031 exchange down the line. I'm trying to figure out how to finance a third of its cost and were considering a HELOC or HEL based on low transaction costs and ease (my understanding is that no formal appraisal needs to happen). Any pitfalls here?

thanks.