The "variables" you speak to could mean this is worth every cent of a 5.4% cap rate to "I wouldn't touch this for a 12 cap".  

If I used the HELOC, the investment needs to generate >9%.I recognize there are many variables not listed here but would love to hear from more experienced investors on more generally how you think about using cash vs. home equity to grow your portfolio in the current environment. 

Last thought (mainly for future readers), you may be talking about the 1 year FHA history if you have variable income.

I will give you my numbers since we are 3 years into Velocity Banking.Home was purchased at $410k.Interest rate: 3.125%30 year termMortgage payment is around $1950 (includes insurance and property tax)HELOC: 8.25% Variable rate - current rateCredit Limit: $97kLet's say I made $10k a month and our expenses were $6k each month including the mortgage.

Have you considered a cash-out refi instead of a HELOC to lock in a fixed rate and avoid variable rate risks?

With the limited info, I would say #1 is your smartest option but there are a lot of variables missing.

That helps some...but your variable expenses also go up too - property insurance & taxes - so a lot of your rent increases go to offset rising variable expenses.I started at the age of 47 in 2018 and we bought properties fast and furious - 12 the first year, 10 the next, and 9 in 2021 and currently have 38 properties. 

Flexibility in Loan Terms: Josh offered a unique hybrid product that let my friend lock in a portion at a fixed rate while leaving the rest variable.

HELOCs are usually variable rate and there may be yearly fees associated with maintaining the HELOC.

(yes, each option has volumes of disclaimers, circumstances and variables...at a high level, conceptually and then we can go deeper as needed.)