@Holly Thorsen see above for potential challenges tapping your equity in the rental.You only need 5% down for a regular mortgage, 3% down for an FHA mortgage - so why don't you have the funds?

With inflation driving up day-to-day expenses, saving enough to buy your first home is more of a challenge.

BTW, I am not disputing you, just playing devil's advocate and wanting someone to challenge my thinking. 

If you have this debt and need money, you may not be preparing yourself for the challenges of being a landlord.

One thing to note- the building is older (built in 1922), is considered in a historical district, and although each unit has been fully renovated, I have not upgraded all the electrical/roof and plumbing, so that's on the older side which I know is more challenging to get insured... 

Challenges?

If a cash out refinance, many lenders will allow the cash out to satisfy the reserves requirement.DSCR lenders generally let you vest either individually or as an LLC.

You can cap the rates it charges, and if you have repeat guests you want to satisfy, provide them with a discount code. 

As others say, out of state investing is challenging.

Your challenges unfortunately are not that uncommon.