There could still be substantial equity.  

So when I refinance out of a short term loan, there will be a nice chunk of built in equity.

Not only were we excited about the equity we built, but after renting it out it cash flowed about $500 profit per month.

it is also difficult to engage in wholesaling with your IRA without providing services to the IRA, which may be why your current custodian is not willing to process such deals.Short term gap funding to an unrelated wholesaler or other such strategies may better fit within an IRA, where everything needs to be very much at arm's length, and where passive income is tax favored (as opposed to trade or business income such as this).

Is an equity play the only option when combining these two?

Buy another property I have an eye on in my target neighborhood for 90k with 20k rehab. it cashflows well and I would use the sale proceeds to cover the property, then refinance after rehab and pull out money again for BRRR. property would build about 35-40k in more equity following rehab in addition to the good cashflow.option c: 1031 into multifamily or larger property find a 600k property, put 150k into property as 25% down, mortgage the rest.

There is no way this property will ever produce true positive cash flow if held long term.Tell him to sell now before th emarkets turn and he loses his equity.

Looking to cash out some equity from a mixed use property. 

Sell asap before the markets turn and you lose all your equity.

Have you looked into Equity Trust?