Best Use of Primary Home HELOC

[Matt J.]

Hello everybody. I've got a question about how to best utilize a HELOC I am taking out on my primary residence. Here are the basics around that and my current REI situation.

I will have a HELOC of around $35,000 dollars against my primary home. I currently own a triplex that has an unfinished, vacant unit that could be turned into an efficiency unit and bring in an additional $550/month in rent to my current $2200/month in rent. I currently owe $86,000 on the property and purchased it for $115,000. In October, I plan to refinance the property, either way, to get my money back out to use towards another property (will have hit 6 months seasoning period by then).

My question is this: should I use my HELOC to complete the 4th unit on my triplex (project quoted at $22,000), or should I use it for a down payment on another property, potentially a duplex?

If it helps, I'm in the  Duluth, Minnesota market and could probably find a duplex for $80,000-$90,000 dollars. I also think with a 4th unit finished in my current property, I could probably get it to appraise for around $125,000 - $135,000. 

Thanks in advance!