HELOC to Pay Back Cash Investor

[Max Prentis]

Hello,

In the process of purchasing a Duplex in Downtown Columbus for 300k. Some minor work to finish renovations but overall in fantastic shape. Positive it will be able to cash flow well from Day 1 really. 

I have an all cash investor who is lending all 300k to me at 8%. The #1 necessity is that i have to pay back at least 50% by year end. The rest does not have a hard set repayment plan (we have a very close, personal relationship). My question is: since the house will be fully paid off according to the bank, would I be better off to get a HELOC on the house or do a cash-out refinance to make the end of year payment to my investor? I like the idea of not making principal payments. I am a Financial Advisor by profession and know that I can take what would be principal portion of payments and invest them for better returns than market appreciation.

Is there something I'm missing? I feel as though the HELOC makes the most sense, but I haven't done this before so I wanted to consult you all first.