If the permanent financing will allow you to recover most of your initial investment and the fair market rent covers the principal, interest taxes, and insurance with cash left over, you have a BRRRR.

You'll want the rents to at least cover the monthly principal, interest, taxes and insurance (and HOA if there is one).

I am using the tax benefit along with the principal pay down and appreciation to offset.

Lease Terms: Determine a monthly rent payment that covers the HELOC repayment (interest and principal) while providing some positive cash flow for you.                    

Wealth-drivers are appreciation, debt pay-down (ie. principal payments) and tax shielding.

You're paying yourself back interest, the principal is out of the market and not going down, AND you're using the funds to build equity in real estate.

This would obviously reduce my cash flow on both properties, as I would be paying the minimum HELOC payment plus extra towards the principal to pay it off quickly.

Trading off current cashflow for principal payoff in the future?

These are amortized payments that include a return of principal each month.

I spoke with the title company who is still helping us wrap up the set-up of a servicing company, and she confirmed that they would be responsible for the principal / interest for Nov and Dec, while we are responsible for the escrow shortage balance (as agreed upon).Not sure how it was missed - not my favorite title company to work with.