Refinance a house to pay back my personal HELOC

I would rule out #1. HELOC interest rates fluctuate and most HELOCs have a balloon date. And, that might prevent you from moving out of your primary residence at a future point. Better to have fixed rate long term debt.

Which direction you choose to go on your refinance really depends on your risk tolerance.   

I used to put all my houses in LLCs until I heard a podcast with an insurance executive.  He noted that lawsuits against owners are fairly rare and in his 30 year career the max payout he ever saw was $1M.   That was enough for me.   I immediately obtained a $2M umbrella liability policy.  It covers not only my rentals but also things like car accidents.  It is worth the few hundred bucks each year.  I now keep all my remaining SF properties in my name or my wife's.

In contrast, I have a friend who is a serious investor who went the other way. He has every single house in its own LLC and those LLCs are owned by a master LLC. I believe he also has an umbrella policy too, so he is about as bullet proof as you can get.

Financing and paperwork is simpler the way I am doing it.  The way my friend does it lets him sleep better at night with better protection.