Quote from @Evan Polaski: @Jamie Parker, for what it is worth, I tend to agree that you can't take the 70% rule for much of anything.  

A HELOC or cash-out refinance is definitely worth exploring if you want to free up capital for more investments, but make sure it fits your goals and comfort level.

In Dallas-Fort Worth, for example, SafeCo recently began writing new policies again.

That risk, in retrospect, is not worth the potential return.   

Not an easy thing, but saving 20% or more on the cost of a new home seems well worth the time and effort if you ask me.

I’ll be honest it’s not clear to me real estate is necessarily a better investment than say the stock market, certainly not a bad investment but not as hyped as some people make it, you need to decide how much owning your own home is worth to you & also how long you plan to be in the area, if you will be here for the foreseeable future, bite the bullet and buy, if your not sure where you will be in a few years, renting might make more sense.

Renovate and Sell: Given that the house could be worth $500k or more with updates, they could do a renovation first, potentially adding $150k+ in value.

Not really worth paying their points if they are just doing what you are already doing. 

.: I haven't passed this past legal review so for what its worth: Part of my standard requirements for everyone include income is at least 3X rent, minimum credit score, say 640, Clean record and no evictions as well as deposit is paid in full at signing of lease and 1st month rent is paid in full prior to handing over the keys.

Never fully trust anyone that isn't willing to share the negative aspects of all this.As I'm sure you've experienced, this can be a very rewarding path to take and depending on your grit and determination, overcoming all the pitfalls are well worth the effort.Cheers and drive safe!