Maximize cash-out-refi to pay less interest on rental property

[Brian Jackson]

I own my 1.5M primary residence free and clear, and am taking my first steps into being a rental property owner.  And have about 5k monthly income I can use to cover negative cashflow.

There are no cashflow positive properties in my area and am very reluctant to look elsewhere because I would like to have it be nearby, and dont want to complicate taxes by adding another state.  Plus I know the local neighborhood and can diy some repairs.

I am looking in my local area of southern California coastal cities where SFH and multi-units can be found from 800k-1.5M+. I am also aware that the market might go down this year and have my eyes on price declines. I know it will remain cashflow negative for many years but I believe in the end it will have a very strong appreciation and positive cashflow.

To finance the purchase I am considering pulling out $726 cash out refinance (the conforming limit) (lower interest rate) and mortgaging the rest (higher interest date). If I am only going to purchase one rental property with the goal of paying it down asap and keeping it long term, should I consider a different financing alternative? A HELOC is not better in this case since this would be a fixed amount and long term loan, right?