Should I pay off my rental, refinance and hold cash or other?

[Brady Pasemann]

Hello all,

I finally bought my first rental with cash and my HELOC. I am very excited, fixed it up and had it on the market to rent...now with the corona virus, I am trying to figure out the best option is with it. Currently it is not rented and I don't see it renting for a month or two, or more. I purchased for 140K, a great price in my area and was worth 200-220K (pre-corona). I took 80K out of my HELOC and used cash for the other 60K. I put about 10K in cash to purchase and fix up. Currently it's not rented and just sitting. I have enough cash to pay it off, but that would not leave much in my savings. I am wondering what the best option is, at this state in the economy. The house I live in, is also paid off, with a $125K HELOC. I have been waiting on a crash to get into rentals and still want to purchase rentals when prices fall quite a bit. I not sure what to do in my situation.

The options I see are:

1. I can pay off and have no cash in the bank. My current home is paid off and our budget expenses are pretty low. This would give us two paid off homes. I would try and get a HELOC on this home as well, for future investments.

2. I could refinance, pay off the HELOC and have a traditional or investor mortgage with low rates. This would give me about 100K of extra cash in my bank accounts. Not sure how the banks will get thru this and if there is a risk of losing your savings in banks.

3. I could sell, get out of it, pay off the debt and have about 150K cash in the bank.  I really, really don't want to do this.  This house is in a nice historic neighborhood, one of the best in my area.

4. Do nothing and ride out the storm and rent when the market comes back.  I do plan to reduce my asking rent and get it rented in the next month or two.

Thank you in advance

Brady