From my observation in getting loans and LOCs in the past, I'd think that a loan would be cheaper for you. I've found the rates are lower than a LOC and like with a LOC, you can always PIF after you finish and sell it, if that's the goal.

If you are going to turn this into a biz, you'd probably want to set up at least a LLC since you are doing the work. You wouldn't want someone to sue for faulty this or that. I'd check with your realtor and banker as they'd be a good resource in how others are doing that as a flipper.