Please help me decide what to pay off first

[Gailete]

Since your rental property's loan is covered completely by your renters, you let them continue to pay it till it does its own slow death. If you pay it in full, your rental income becomes higher and you will have to pay that much more when doing your taxes. I too think the smartest thing is pay off the second lien and then the HELOC then your cars. With all those paid you can plow money into your mortgage to yours hearts content.

Unless I missed it, you don't seem to have much in savings if the $15K cash is it. Savings is where a lot of the money needs to be going as well, but like I said I may have missed that among all the numbers that were floating around. Your rental property and mortgage are the last two things to pay off since they both have tax consequences.

[HappySaver]

Paying off the lien at 7% first is a no-brainer. I would plow through that and get rid of it asap.

After that's out of the way:
The HELOC may be tax-deductible (depends on the conditions under which you took it out). If so, the actual interest rate is even lower than 2.75%. But it is a variable rate, and rates are only likely to go up. That's why while I would still put extra payments towards the rental property, I would make sure a steady stream of extra principal payments were always going toward the HELOC as well. Maybe a 50-50 split? The goal should be to be lowering that HELOC payment to the point where you could quickly pay it off if rates go up.

Oh, and I agree about your emergency fund. It's WAY too low. After the 7% loan is out of the way you should be putting a portion aside into savings.