1031 - Small House Purchase - Unable to Cash Out Refi

[Gordon Way]

Hey BPers!

A bit stuck in a REI conundrum. Last summer I completed a 1031 exchange and picked up two properties (financed) and one cash purchase. After rehabbing the cash purchase (purchase of $65K, rehab of $7K), I run the comps and see it would appraise at $72-$77K, it's a 1/1 @ 590 sq ft. I own several other properties, which have a mix of equity, sizes and rates. I have started looking for a cash out commercial/business mortgage for a group of 5 properties. The problem I'm running into is that no one (yet!) will take this smaller house (due to size and/or value) as part of the loan. The equity from this house would pay for the loan and I would still receive about $50K cash when all is said and done. Anyone have any ideas if lenders will cash out a small home like this as part of a portfolio or even by itself? These small home cash flow great where I live (San Antonio), but I'm hoping they don't become too much of hassle with lending and refis. Looking to get creative here! Let me know your thoughts on this particular scenario and any wise guru thoughts out there on this type of REI model. Thanks in advance!