I have criteria that I look for in rental property and I never stop evaluating houses independent of what the market is supposedly doing. I don't wait for someone else to tell me it's a good idea to buy; I let the numbers tell me that.
Right now I keep my down payment funds in VTSAX. Typically local real estate cycles and stock market cycles do not move in tandem with the great recession, of course, being the outlier that is fresh in all our minds. Maybe I'll eat my words and the next time my target markets give me lots of buy results on my spreadsheet, it will correlate with a stock market drop that will eat into my ability to purchase as many as I would like. If so, I would probably wish that I went with laddered no pre-withdrawal penalty CDs.
Personally, I'm not a fan of HELOCs for these situations. HELOCs are callable so if the bank no longer thinks your home has the equity in it to support the additional debt, they can call it back in part or in whole. To me, this is an unpalatable risk. If I wanted to use property equity to make a down payment, I would explore a cash out refi or a second mortgage while the real estate market is strong in the area that property is in.
The only time I would be comfortable with HELOCs would be a situation similar to what sammybiker is doing in his journal- buying distressed assets in cash, improving them to market value, then pulling the cash back out via traditional bank loans in a relatively compressed period of time.