Payoff HELOAN used to buy rentals?

[Jonathan Joyce]

Any advice here appreciated. In the last few years I took out a HELOC on my primary residence, used the funds for the down payment on two investment properties, then refinanced the HELOC into a 30 year loan (7/1 ARM) as a second mortgage against my primary res. In essence I financed two properties at 100%.

The rental income minus the mortgages has me in the red around $450 a month. If I paid off the ARM, I would flip to black cash flow around $450 a month. Question is should I pay off the down payment loan (7/1 ARM) early or put that money into savings and just refinance the ARM at end of the term? I don't currently have the money to just pay it off but considering if I should attack the loan over the next few years or save liquid funds for future deals.