Help with Refi or Heloc Decision/ Starting our rental portfoilo

[Andies Shepherd]

Okay Bigger pocket, need some guidance. We bought our current home inn 2017 for 200k @ a 5.125% interest rate with Wells Fargo we got an FHA loan and ended up coming out of pocket 9k for the house. We have done a lot of work on the property, partly to make the home which was remodeled before we bought it, nicer and improve our standard of living. We have redone the kitchen counters, cabinets, blackspalsh, added cabinets and stainless steel appliances. We have updated all of the light switches to rocker switches and outlets to usb/outlets, redone all of the bathrooms and remolded the master closet. We did a lot of this work with the mentality that it would A. make the house more valuable and B. help in preparation for owning rentals and being able to manage rehabs with a bit of understanding and know how. I think all of this matters to the answers i hope to receive but maybe not, (in which case sorry for being so long winded). We want to leverage this house and what we have saved (around 20k) to get into our next investment property(s).

Stats:  House (a 3/2.5)  is on a 30 year fha@ 5.125% we owe 184k on the house, it is worth $285k our payment is $1716 a month the area it is in is a growing pocket Just north of Austin Texas in a pretty desired neighborhood.

Looking for some input on the best next step , should we:

1. 1. Refi (no cash out) to lower the rate, then take a heloc to help secure a rental property in a cheaper market outside of our county (Travis). 
2. 2. Cash out refi, then use those funds to purchase a rental property in cheaper market. 
3. 3. Take out a heloc and use that to pay down the 30 year we have chipped into with overage payments over the past 3 years and also use it to purchase a rental property? 
4. 4. Qualify for another owner occupant home and use the 20k for the 5% down then move a renter into our current house which would cash flow around $200 a month after all expenses (This was the original plan as we took the bottom of our Loan approval amount to one qualify for another owner occupant and grow our rental portfolio). 

Thank you i don't think any of these options are bad, just hoping to get some broader insight from people who have maybe been in this position before.  Thank you so much look forward to hearing what others think. 

[Jody Sperling]

Your fourth option creates the most stability. If you can find a house that needs fixing in your market and buy below value, rehabbing it up to value while you live there, you'll have the biggest financial win, too.

Be careful of using Zillow to estimate your primary home's value, too, by the way. We own two rentals, that in this market, would sell for around $170k. The first house appraised for $120k. The second house appraised for $145k. Banks are very conservative in our current environment.

I mention this because it can have a major impact on your plans if you're hoping to obtain a HELOC.

Best of luck moving forward!