Hadn't counted on this curveball - refinance woes

[Tookie Nemchak]

In July, my husband and I invested $112,000 in a single family home.  We financed it through a mortgage company with 20% down obtained by selling stocks. After putting $3500 into it, the home is now valued at $150,000. 

We are now under a due diligence contract for a $190,000 4 plex and planned to refinance the first one to pull the equity out for 20% on this purchase.  Lender says I have to wait A YEAR to do a cash-out refinance.  Not sure how I missed that little detail.  Now we are faced with pulling funds from 401K (we are over 59 1/2 - tax but no early withdrawal fee) to cover the down-payment and cost to finance. 

Where did we go wrong? What should we have done? Is it too late to go another direction?