Would pull out Heloc 3.99 and pay off rental

Question

Hi everybody! I bought my first property in October 2024! Yay! After procrastinating for so many years :( So great full for Bigger pocket community who advises me along the way . It is a Triplex and out of state and rent out all units . since purchasing the property with a 25% down portfolio loan through a bank, Interest rate when I bought was 6.89 , new construction so no much expense on maintenance and so forth .

Cash flow Made a little below 300 from each unit .

My question would that be ideal to pay down the principal taking out Heloc at 3.99% one year promotion from my primary residence which has an equity around 220k or better to use it for a second investment property ?

Also anyone knows better rate / terms for Heloc in California, I am open to check out ?

Thank you so much ahead for  your input

Greg Kasmer · Answer

Kabene - If your HELOC rate is 3.99% for only one year, not sure it makes sense to pay off your principle on the loan. Once the year is done, what would be your plan to pay off the HELOC? Personally, I would take the promotional rate on the HELOC and use it to find another property that you could BRRRR and then eventually pay off the HELOC with the refinance from the BRRR. Good Luck!

Kabene Gebremariam · Answer

Thank your ! Appreciate your advise .

@Greg Kasmer, my plan after one year is to sell  to 1031 Exchange and pay back the Heloc .but definitely I am also considering purchasing another investment property.leveraging the one year 3.99 % interest .