Increasing cash flow using Equity Line of Credit
I'm in the process of acquiring a equity line of credit on my investment property. I am considering doing my own escrow and financing the entire property through the HELOC because the initial rate offer of 8.64% is high in my opinion. If I finance the entire property mortgage the bank is willing to drop the rate 1-3% depending on what it appraises for. Then I can chose to make interest only payments on the property for the 10yrs I have the HELOC for. I can then cash flow $150-200 more out of the property.
Does anyone have any knowledge about this financing style for a investment property? What's the down side of doing interest only payments? Is there anything else I should be considering?