Sara,I see this a lot and I always ask if you know you are going to refinance in the long run to consolidate the Heloc why not just do a Cash out refinance instead. 

@Timothy Frazier Yes, the only reason to use HML as a down payment is if the property is "mostly turnkey" AND you don't have the funds to renovate AND you have strong CMA comps from a real estate agent that supports that the fact that you are buying a property that is under valued AND your renovations would push that so that you could refinance.

If you are trying to continue holding the other two properties then you should pull out some equity in the form or a cash out refinance on one or both or use a portfolio loan as @Jimmy Murray suggested.

As you grow your portfolio, they can help you secure additional funding, refinance existing loans, and adapt to changing market conditions.Financing doesn’t have to be a roadblock to your real estate dreams.

Will refinance if rates go down in the future. 

We would also be working with them to prepare them for refinance from Day 1.

No - absolute max for DSCR is 85% LTV and that is extremely rare and typically not workable in this rate environment anyways.Standard/common max is 80% (acquisition and rate-term refinances) and 75% Cash-Out Refis

My suggestion if your goal is to free up some equity to use for another purchase - start small with the single family home with a cash out refinance.

And if you bought this property several years ago, then you probably already have a killer rate, so suggestions to refinance seem silly as you probably already have the lowest rate....especially if your refinance was completed as you were an owner occupant, and not categorized as an investor to a Lender.In terms of tax implications, again, it depends on what your ultimate goal is, but if you placed this into a trust, or even a beneficiary deed, it would pass through to a beneficiary who would not have to pay capital gains on it in order to sell it. 

I figured this could possibly put me in a good position for a cash-out refinance when I’m ready to move on to a second property.If I stick within my budget, Philadelphia seems to offer the most housing availability, but I’m concerned about most houses available being in rougher neighborhoods.