7 year ARM and Home Equity Line

[Bradley Reber]

Hi! I'm a relatively new investor. I plan to move into an owner occupied SFH soon and have a potential deal in the works. Its a SFH in Huntington Beach, CA. While I have relatively good earning power (Anesthesiologist) and good credit, I do not qualify for a conventional 30 year fixed loan for various other reasons having to do with other properties I own. I do have a lender who is likely able to get me into the following loan program though... 920K on a 7 year arm, fully amortizing and currently at 4.375%, with a second for 110K being a home equity line, interest only for 10 years (30 year term) and currently at 5.74%. I would put 10% down. My questions are...

1.  Whether I live in this next home forever or decide a few years down the road to move on and rent it, or even sell it or trade up, rates are likely going up and these variable terms scare me a bit, especially because of the high loan amount.  Do I turn the other way and run from even doing this purchase?  Or, if I do the deal, what are my options or exit strategy in the future?  What if this property within a mile of the Southern California beach doesn't appreciate as expected and I have to sell?  What if rates go way up and I'm either stuck with a high mortgage myself or more negative cash flow from a rental?  What are the chances I could refinance into a 30 year fixed with a little equity in the home in a year or two and will rates be so high then that wouldn't be a good option?  Not sure what to do here... 

Torn on this one.  Any advice would be helpful.

Thanks!