Financing options - helping parents buy first invt. property

[Markel Zurita]

Hi everyone!

I'm new to BiggerPockets and I'm helping my parents (based near Dallas) find the best options for buying their first investment property ($150k - $200k range). Below are the financing options available from their lender:

1. 1) HELOC: limit of $120k and interest rate of 4%.
2. 2) Refinance primary residence: circa $4k closing costs, 2.75% interest for 15 years, 3.25% for 30 years.
3. 3) Investment property mortgage: circa $3k closing costs, 3.00% interest for 15 years, 3.75% for 30 years.

Assuming no cash for down-payment, I'm leaning toward using the HELOC for 20% down and using option 3 for a 30-year mortgage at 3.75% to keep monthly costs as low as possible and maximise cashflow. What do you think?