The issue at the moment is inventory and Lenders are backing away from short term rentals.

This is a single family home and was originally a primary residence before turning it into an long-term rental.Some strategies I'm considering to grow my portfolio are using a HELOC/1039 tax exchange to purchase a second investment property/multi-family property or refinancing my current investment property into a conventional loan to utilize another FHA loan for a primary residence (with the idea of eventually turning that into another long-term rental).I currently have a 7% interest rate, and am considering refinancing in the coming months if/when the rates drop.

It sounds like you are running into hurdles with conventional financing. 

Why not 5% down conventional, seems like that works with the available cash and closes this at $100K. 

Rental rates are coming down due to some excess inventory.

Conventional Mortgage 5% down and 4% interest rate.

Purchase price: $257,150 Cash invested: $12,000 House hacking Duplex purchased using Conventional 5% down loan.

Like you said, many roads in that area of Lehigh are unpaved or very run-down, and I personally don't see that changing in the near future.I would definitely be happy to further discuss numbers, decent vendors, and current inventory with you for our market, just let me know!

One of the good things about DSCR Lenders is that the guidelines and programs are different and not cookie-cutter 100% equivalent like conventional lenders that all must mirror the GSEs, etc.Most DSCR Lenders will have similar rates and terms and generally similar processes - so generally what will make the "best" one is the best one for your needs - I would focus on any specialties or niches - like short term rentals, if you do multifamily or mixed use, BRRRR Method or focus in on a specific market - find someone who specializes and has a good track record in that niche or area

That might help rent increases as that inventory burns off.