Thoughts on expanding in Indiana

[Tyler Schenkel]

I have a SFR in Indiana with about 20k left on the mortgage. Comps in the area place it in the 200k-240k range. I am looking for the hive-mind perspective on the most advantageous options for purchasing an additional property south of Indianapolis (I am now out of state, but familiar with the area and have a good agent/property manager which is why I am focusing on this area). The currently owned house was done under a VA loan and purchased 10 years ago. I also have a small amount of money saved up that I could use as a down payment and still have some left over for reserves.

Some of the options I am tossing around are:

-Seek out a cash out refinance and combine that with personal capital to buy another house outright (The rationale here would be to leverage the debt into a new property while minimizing the number of loans).  I realize that this may not be the most efficient use of my equity, but seems to be a prudent method of cautious expansion given current uncertainty and it gives me a placeholder for cash that is otherwise doing nothing (yes, I know, that is a whole different problem).  

-Use existing capital to put a down payment on a new house using a conventional loan--Open to suggestions on this as I have not previously researched conventional loans for investment properties and am open to hearing what the current issues are for people attempting to obtain conventional investment property loans.

-Seek out alternative financing options--I feel like the consensus is to seek out this route when conventional methods are unavailable?  Does anyone have any experience in using hard money or private money options readily available that were actually more advantageous?

-Pay off the existing mortgage to make me a more attractive candidate for a new conventional loan (not a big fan of this since there is little other incentive to pay off the mortgage, which is current at 3.5%).

Open to everyone's thoughts. Ultimately, I would prefer to start my expansion into another SFR that is near turnkey, but open to other ideas as well.