Hi Michael, Using a HELOC to fund your first rental can be a smart move, especially if you want to keep your cash on hand for other expenses or future deals.

Generally, lenders base their refinance valuations on the property’s in-place income and existing condition, not future projections.

I am looking to purchase more rental properties in the near future.

They originally wanted 360k, but the mortgage would have the property running negative for the foreseeable future until all renovations are done, which I won't do. 

You have used home equity lines of credit to purchase investment rentals and want to know the best way to pay down the HELOCs.Between the two properties you bought, after expenses, you have $250 a month positive cashflow to use.What I like to do is pay down some principal every month with my positive cashflow.I use my extra active income from real estate commissions helping other investors to pay down the principal even more which just frees up that credit for me to use again.I know I can refinance the HELOC debt before it changes to principal and interest as it is just interest only payments as yours are.One difference is the cashflow, I have greater positive cashflow and could make the principal and interest payment in the future with the extra cashflow I already enjoy.I always get HELOCs on my income properties as well after purchasing them to pull out as much of my downpayment as possible.

I hope with this extra info you can see more clear my current and future goals. 

So adding 2/3 equivalent properties that will have the opportunity to appreciate in the future, without mortgage, was the idea behind option 2 (+ renting out something in Seattle)

They are about to move out and I’m nervous to rent to a stranger in the future with this same policy.

Get an attorney and get these losers out then hire a property manager to properly vet any future tenants! 

There is some future Infrastructure improvements taking place, which can/cannot impact the property ROI.