The only way to avoid them is to put more money down or you need a lender that offers their own product. 

This is the best solution I've seen (https://www.amazon.com/gp/product/B075K6PHJ9/ref=as_li_tl?

Long-term Investment Value: Over time, demand for properties with more amenities (like the extra half bath) could increase, which may help you achieve better returns, even if the immediate ARV bump is minimal.Overall, it may not drastically change the ARV, but for rental purposes, it could enhance the property's desirability and boost cash flow.

They only have a private REIT product now. 

This is generally going to be a loan product for a long term buy and hold property. 

Elwin, in general, HELOCS are second lien position products.

Just because a product is more expensive doesn't necessarily mean it provides greater value.

TLDR; Finding landlords who are interested in arbitrage is a by-product of targeting the right landlords, creating a valuable offering, then putting in the work. - - - - - I have a portfolio of 10 arbitrage units in Phoenix and work with three landlords. 

The market is competitive but if you deliver a consistent quality, in demand product at a good value you will do fine. 

If you were to refi, I'd consider going with an Interest Only product, increasing cashflow.