The waterline should be marked on the drawing of the boat your'e building. At some point you mark it on the model and test the hull on the water and determine how much ballast it will need to float the hull to the waterline. The weight of ballast will be decreased by the weight of the batteries, control gear and motor and of course the rest of the model, upperworks and fittings, etc.
The ballast may need to be divided into several discrete packets arranged around the inside to trim the hull so it floats level in the water. a small amount at bow and stern will stop the hull "digging in" as it moves forward and 2 portions set amidships just below the waterline will help prevent the boat from rolling unduly.
Obviously the testing needs to be done when the hull is waterproof and don't forget to plug the proptube if the prop isn't fitted to prevent sinking. If it's ready to run boat like a racing boat or sailing yacht there are plenty of sites where you can find information about trimming the hull to get good performance. HTH
If this is related to your Sheffield build I've got some books in PDF format I could send you if you would like them. PM me with an e-mail address and I can e-mail to you.