There is now a HUGE surplus of very good homeowners that had to foreclose on their home in the bubble states or folks that have to move for jobs but are no longer qualified for a mortgage right now.

I’m interested to convert my primary home to a 1st position HELOC to accelerate my savings to reinvest.My concern is that if I pursue this system of dumping my surplus income into equity, how then would I look to a lender if seeking to expand my portfolio via a traditional mortgage.Under normal circumstances, lets say I have 50k sitting in my savings account.

The area still hasen't bounced back so there is now a surplus of property and I barely break even on the property rent.

If the 2nd mortgage(junior lien) goes to foreclosure and there is a surplus of funds after being sold to the bidder, will the Senior lien receive any of the surplus?

(Which I have a surplus in)I spoke to the owner and he said it was easy to self manage with some software and a good goto handyman.

Our local government has over 10,000 homes that is selling in surplus at rock bottom prices.

All are very durable, and all can be found at sales, builders surplus warehouses, craigslist, Overstock, etc.

.- The city budget saw a $50 million surplus last year.- Pension liabilities are at least 75% funded, which is better than most cities its size or larger. - The Cleveland Metro School District just passed a $67/yr million citywide property tax hike that is touted to vastly improve the quality of inner-city education through the use of specialized boarding schools, targeting high-crime neighborhoods, and other innovative secondary education techniques.- Downtown residential population is increasing at 20% per year or greater, and more than 5,000 brand new units from converted downtown office buildings will come online in the next 18 months.

So in other words: use cash flow to build cash reserves and only then use any surplus as described above. 

"cash out refinance or use my own money"Do both.If you have surplus cash, above and beyond your emergency fund, invest in another property.As for refinancing you never leave dead equity in a property longer than you must to meet the refinance regulations.