To depend on the rates to drop substantially to cover refi cost is a gamble.

I strongly believe that legislation should be introduced to prohibit property wholesaling and also prevent double closings unless it can be demonstrated that the property's value has been substantially improved.  

A substantial portion of my real estate transactions 'work' because the borrower was paired with a lender offering unique qualification or feasible terms that meet or exceed the investors original ROI, COC, down payment or general investment goals. 

I bought 12 BTR post Katrina for the Go Zone bene's which were substantial..

Palo alto the 180 recently traded at 3.2 mil and the 350k one would be over 4 mil.. and would have cash flowed a ton :(  But you know I was at the time afraid of negative cash flow and I did make substantial profits on each that went into my business.. so not all bad.. 

For a bathroom or kitchen type remodel scope I will side with you, 1/3 wouldn't present any red flags but not for a more substantial renovation scope and certainly not as a general rule of thumb for all construction projects.

Interest Rate StabilityThe 6.375% rate is significantly lower than the 7.75% rate, which translates into substantial savings each month ($641.66).

In your situation the OA is going to play a more substantial role because you have a partner.

There are plenty of people that would be interested in taking some cash out of their vacation home while still using it once in a while.

Have a substantial liability insurance amount and worry about an llc down the road while you are saving up to buy another.