Seeking some advice on getting financing

[Naomi S.]

I'm sure this is a CPA question and the answer is "it depends".  But I would appreciate it if I could get some guidance from this community about the most efficient way to finance my future investment property(out of state turn key). 

I was hoping to get a HELOC on my home to fund my first real investment property. However, the bank rejected my application because my DTI would become too high with the combination of the HELOC and mortgage payment. I've saved enough to pay back my mortgage in full. Do I:

1. Use the savings to buy my first small investment property as a cash buyer? I understand the downside as, no leverage/higher taxes on my profits without a mortgage/probably won't be able to do a cash out refi.

2. Repay my mortgage in full to bring my debt down. Get a HELOC and use that to buy the investment property. Pros: leverage, tax deductible. On a separate note I was looking to buy a property under a LLC. Are there any limitations in using a HELOC under my name and using it for the the investment property under a LLC?

Should I be considering other options?

TIA! 

Naomi