If the rate is reasonable then it may make sense to try to save fast to get to the 3.5% down payment on a double or triple - househacking may allow you to increase your savings rate and pay down that loan even faster.As for estimating costs, closing in NY factor at least 1% of the mortgage amount for tax, plus $1500-2000 for lawyer, title and fees, then the amount required by the bank for escrow will depend on the actual property taxes and insurance.

I have a mortgage connected that, for some reason, reports it as an escrow balance, throwing off my balance sheet. 

I got my first one with a 5% down while the tenants were covering almost all of my mortgage.

Currently I have a mortgaged Duplex.

I'm stressing because I wasn't anticipating this and am not excited about the prospect of paying 2k more than I was expecting when my mortgage payments kick in next month.I'll be searching the forum for answers as well, but since I am kinda desperate at the moment, I thought I would go straight to the source for advice.

I am an investor, agent, and mortgage lender here in AZ who primarily does investment transactions.

Deductible expenses include a proportional share of mortgage interest, property taxes, insurance, utilities, and repairs.

And you assume the rest of the mortgage that you're already guaranteeing.Your idea to refinance immediately after to get favorable financing is perfectly fine. 

My concern is that if i apply for a HELOC to use for the down payment before i apply for a mortgage, A) I wont get approved due to my DTI ratio, and B) I wont get approved without first showing the bank I have the 20% down payment before pulling the HELOC.

Supposedly we can then use that 8k plus what we are paying for rent today to pay a 13k mortgage house.