There are ways to use loopholes but it has to be done correctly to avoid issues.If you can rent your current home and it cash flows simply do a cash out refinance pull out some cash and use it for a down payment.

Sometimes when modifying a loan, if you are increasing the P+I, that could be considered a refinance, requiring you to re-underwrite (due to Dodd-Frank's requirement to show the borrower's ability to repay). 

Others are okay with a small net loss for high appreciation and know that a reasonably near future refinance could knock them into the green. 

It is more common to see 80% LTV on rate-term refinances, and some lenders will allow you up to $5,000 in cashback proceeds.

You don't need to know everything to get started; you need a foundation to build on, and the rest will come through experience and then refining your education.You can build a basic understanding of investing in 3-6 months.

I am looking to buy again in the next six months.Here’s the situation:I own a home in San Diego, currently worth about $1.05 million once the ADU is built.I owe $680k on the mortgage at 4.25%, with monthly payments around $5,500.The property generates $7,500 in monthly income: $5,200 from the main house as a vacation rental and about $2,300 from the ADU as a mid-term rental.My broker is advising me to do a cash-out refinance and switch to a DSCR loan, then move the property into my LLC.I’m hesitant because current interest rates are around 8%, and I was originally considering a HELOC due to these high rates.Given the high rates, would you recommend sticking with the HELOC, or does the DSCR loan make more sense in the long run?

Best of luck with this property, If it goes well you will be ready to refinance into a better rate and your next deal when ever we see better rates come back.  

If a cash out refinance, many lenders will allow the cash out to satisfy the reserves requirement.DSCR lenders generally let you vest either individually or as an LLC.

@Zane Cress  a refinance of a property after a 1031 is not a taxable event. 

@Zuber Allibhoy @Victoria Weiss @Manny Raimondo @Mauricio Blanco Did you guys have any luck with heloc refinance on investment property in Texas?