If going for the refinance (investment loan) option, you'd either need to come up with another 20-25% deposit, or have already accumulated that or more in equity (according to Lender appraisal) in order to qualify (separate to how much you need for your next primary, also). 

I had my plan and strategy all worked out - complete a few value add projects on my home by end of May, refinance, ARV opens up about $90k in equity.

Fellow San Diego VA family member here (my husband is USMC retired) and we are currently working on Option #3 with our home - pulling out about $150k in equity to use for investments.

For example, if you buy a house for $100k and get an 80/20 loan to close, you would have $20k in equity.

I more than have the $18K or 20% down.I have anywhere from $40K-$60K in equity, conservatively as I bought the 4 below market value. 

They had run up in equity of 1 million to 1.5 million and they are getting 3% annual return.

  $40,000 in equity (25%) will stay in the property.You are using the wrong numbers to multiply (Purchase price and Rehab cost do not determine the Refinance loan amount). 

I discovered that the property is listed with a realtor and still has an auction date set. the property looks like it is in very good condition based on the listing pictures. according to my sources the property has approximately 200k in equity and is holding a current value at around 600k.

I now have 30k in cash and 180k in equity in my PR.

With that in mind, probably the ROI is not going to be great, because you have all this money in equity, no leverage.