What's my next move... any suggestions?

[Matt Miller]

Here's my situation:

My 2/1 house is worth $340k (I live there and it's my only property), and has a conventional loan.  I still owe $150k on it, so I have $190k in equity.  I've lived here for 5 years.

I also have $70k in savings I can draw from.  I have no credit card debts, no auto payment, and good credit above 700.

I was thinking of purchasing a second property and live there for two years, while renting out my current house.  On my house, my mortgage/taxes/insurance are just $1,240/mo and I can rent the house for $1,900/mo, so it's worth holding onto and just renting it out.  It's in a good location near the beach and it would also work as a vacation rental.  So there's no reason to sell it.

I was thinking I'd purchase a new property to live in it for 2 years, get it with a conventional loan, and only buy a house that would have potentially good cash flow.

Remember, I have $70k in liquid cash right now to play with.

So would I do a "cash out refinance" of my current home and pull out some of the equity to get more cash?  And how would I qualify for a conventional loan on the next property, if I've decided to keep my current home and rent it out?

What would my next move be?  any suggestions here?