ahhh.... debt

I spent a good chunk of yesterday morning coming up with strategies for paying down our two most nagging pieces of debt... the $30k 0% bt debt from the Garage Project (see left sidebar), as well as a $30k second mortgage we have on the apartment building (7.7% and adjusts in January 2012). My goal is to be able to pay both of these off before the four years is up, but coming up with not only the best way to do it, but a feasible way to do it, is proving difficult. My motivation for paying off the second mortgage is that I don't want the hassle of refinancing it, and the pessimist in me says the rate will jump substantially at the time of adjustment. I knew when we took it out that an ARM was risky (that's the only ARM we have, all of our other mortgages are fixed), but the amount is fairly small and I figured I could pay it with a low-rate credit card if necessary. The two strategies I've come up with are very similar. They both have the same total monthly payment amounts ($2,050 until the end of this year, $1,500 going forward - childcare expenses kick in in January). They both rely fairly heavily on us cutting back our expenditures, as well as several $100 per month in 0% balance transfer proceeds. ******************* Option 1: Aggressively pay the 0% CC debt until the total is below $23,000 (the amount we have available on a HELOC), then switch all efforts to the 2nd mortgage. Come back to the CC debt once second mortgage is wiped out. Total interest paid (all tax deductible): $3,225 End date: March 2011 Risk: 0% BTs will dry up (little indication of that right now) and debt will need to be moved to adjustable rate HELOC that is higher than the current fixed rate of the second mortgage. Also a risk that we won't be able to repay the debt as rapidly as hoped and we will carry credit card debt longer than we anticipated. ****************** Option 2: Aggressively pay the 0% CC debt until it is $0. then switch all efforts to the 2nd mortgage. Total interest paid (all tax deductible): $6,500 End date: May 2011 Risk: Very little. Risk that rate on 2nd mortgage will adjust before we are able to pay everything off, but in that case we will have a open HELOC and no CC debt that we can leverage to pay it off earlier. ****************** The cheapskate in me likes Option 2 because we would save a couple thousand in interest, but the risk of Option 1 is a turnoff. I might put together a few more spreadsheets with a balance of the two, as well as a less-aggressive plan that goes all the way until December 2011 that might be more feasible. One thing I purposely left out of both plans is any windfalls, ie my yearly bonus and tax refunds. I've considered going with Option 1, with the caveat that any windfalls would be applied directly to the 2nd mortgage... kind of the best of both worlds. Any thoughts?