Can't get equity out of my investment property.

[Etan Ofrane]

Hi all.  I live in Jersey City, NJ and I recently bought a single family home right next to the one I live in for $750K.  I paid cash with money from a 1031 exchange as well as a home equity line of credit from my primary residence.  The place needs about $150-200k of work.  The problem is I am having trouble getting the equity out of the property to use for renovation.  It seems crazy that a bank wouldn't give me some kind of equity line of credit since the property just appraised for $825k but I haven't had any luck with the few banks that I've tried (TD bank and some local banks).  The issues are: 

1.) some banks have said it's not habitable (not all), 

2.) It's obviously not yet producing income since it needs work

3.) A lot of banks won't do HELOC's on investment properties

I could easily get a hard money loan, but am not really interested in paying those interest rates (14%!!!).  I'm surprised that this is so difficult as I'm sitting on a completely owned asset worth 800k.  Are there any products/banks I should be exploring?  Any advice would be much appreciated.  Also, I know that these numbers seem absurdly high to people outside the NY metro area.  That's because they are absurdly high and this area is ridiculous.