I have preaproval for a 250K loan now.

(Get an owner occupant loan.)Can you seller finance it for more?

Last minute they changed the deal to a mortgagee loan and cut the SOW from $65,000 to $40,000.

@Michael Ewersi can only speak for what i've done as i suspect it varies by market. 

You would then have two loans, one on your home and one on the refi to access the equity on the investment home.Why not just use the refi cash out from your home loan for future deals? 

If you are willing to live in urban areas you may want to talk to a local bank in your market and see if they have any incentives or grant loans for certain areas.  

I invest in Boise, ID and do quite a few BRRRRs, LTRs and STRs- varying degrees of success depending on how much equity we can force and the type of back end financing we can find, but the tax benefits are great and it's a rapidly growing market and Idaho is probably the most landlord friendly state in the nation. 

I borrowed $30k on a personal loan from Discover for 15% with no fees for a plot of land and paid "cash" for it.

Refinanced August 2020 into a 15 year loan at 3.375%

Personally, I'd cash-out refinance into a 30 or 15 year loan.