Use Investment Property Equity or Cash for Down Payment

[Jason Mayers]

I have an investment property w/ 320k of equity tied up into it. The loan is at 3.25% so I don't really want to touch it if I down have to. I currently rent and want to buy a primary home soon. I also have $200k of cash available that I need to put to work. I'm looking at homes between 575-700k to purchase in a tax free state and want to put 10% down. Should I use my cash available or take out a HELOAN and just pay it off quickly? 

Investment property: $1100 payment / $1500 rent (will increase $100 each year to $1900) , $122,000 owed, $458,000 appraisial.

Income: Net $20k/mo after maxing out 401k/IRA/HSA.

Savings: $200k in a HYSA (would put into index funds if I didn't use for DP)

Credit: 820

TImeframe: 22 years to retirement

No credit card or other loan debt.