Cash out Refi or HELOC on rental?

[Michael Rodrigues]

I own a rental townhouse that has approximately 60-80k in equity (hasn't been appraised). I owe about 160k, and comps are around 240k. I'm looking to get another rental property. Should I be looking at doing a HELOC, or a refi cash out? I'm trying to free up some cash to put down on the next property. I understand the HELOC is basically a loan/credit account, while cashing out would be cash in hand and a slightly higher mortgage payment, which could be almost negated by raising the rent to current market levels. Any other advantages or disadvantages to each? My understanding is that it is harder to get a HELOC on a rental, but I've heard of others doing it here in Utah and some CU's that are offering up to 75% LTV. While I don't think the equity or cash out would be enough to cover 20% down, there is a CU here that's offering a 10% down loan with no PMI for rental loan which is probably the route I'd go. Thanks in advance for your help/advice!!