Id say rent it and refinance it and go back to the drawing board later when the local market rebounds 

Having the option to wait longer to refinance will give you time to do any updates and repairs and raise rents. 

Asset based mortgages carry a better rate but you are going to have your assets locked up not able to touch until you refinance or sell the properties.

So if you refinance the first home into a conventional, then buy another home and move into it you can use your VA benefit.

Now most likely they will have to do a double closing, but they can also do a JV with that person until they refinance out.

I was thinking I would need to get a hard money loan to cover that, and it would eat up most of the rest of the cashflow and then I would look to refinance within a year or two.

You can cash-out refinance with some DSCR lenders in about 90 days.

This definitely comes in handy when it's time to refinance.

Some real quick items here:VA Loans are for Primary HomesYou can use VA Loans for 1-4 unit properties (House Hacking)VA Loans have 0% downpayment (most of the time)You can have more than 1 VA loan (some people don't know that)VA Loans do carry a "funding fee" which is like a little "tax" to write the loan, but it is waived if you are a disabled veteran.VA Loans do not have PMI (and that's a huge benefit for us)VA Loans also have a very streamlined refinance feature (called a VA IRRRRL) which makes it super easy to refinance if rates were to fall (hopefully that will occur in the future)VA Loans can also be used by a surviving spouse.The VA may not give us the best health benefits but they can certainly get us into debt!

One solution for investment property HELOC's would be to consider a first position DSCR cash out refinance.