HELOC vs. Cashout Refi on this deal?

[Allende Hernandez]

Hi there guys, need your help figuring out my next best exit strategy for a deal I have stuck in the market.

I have this property I bought with the intention to make a flip but for some reason it is stuck in the market and it does not sell. I believe the problem is a hefty CDD which I overlooked going in and now I am paying for my mistake.

If the property doesn't sell my next exit strategy needs to involve pulling as much cash as possible out of the deal to free up my operating capital and go on to the next deal.

I bought the house with a HML which I already paid off with a HELOC on my primary residence (interest only @ 3.25%).

My plan B is to do a lease option on the house, I have several potential tenant buyers asked about that possibility so I believe there is a market for it.

After talking to a few lenders, the best I've been able to find for a refi and cash out is 75% LTV @ 5%. I haven't done an appraisal on the property but that would leave me with a huge chunk in the deal.

I though of pulling a HELOC on the investment property but no one would do it. They do "secondary homes" though with an 85% LTV and similar APR to what I have in my primary residence. I could choose between interest only or PI.

Can anyone help me come up with a creative way to get the cash I need out without killing cash flow with a higher interest rate? The spread is tight due to the CDD.

Thank you very much in advance!