This is a single family home and was originally a primary residence before turning it into an long-term rental.Some strategies I'm considering to grow my portfolio are using a HELOC/1039 tax exchange to purchase a second investment property/multi-family property or refinancing my current investment property into a conventional loan to utilize another FHA loan for a primary residence (with the idea of eventually turning that into another long-term rental).I currently have a 7% interest rate, and am considering refinancing in the coming months if/when the rates drop.

Provided your Sub2 purchase closing is done complete with all the necessary paperwork (e.g. limited power-of-attorney between the sellers and you), refinancing should be no different than a normal refinance.Sub2 can be heaven or hell, depending on the quality of your closing paperwork.

Given that you have somewhat higher interest rates on 2 loans you might consider refinancing but not paying them down which would allow you to keep your reserves in case you need them in the future.

If you needed to pull cash for the rehab then I think HELOC would work best to keep your rate, but if you're only refinancing to move the property into your LLC then it doesn't seem like it's worth it.

The SFH originally cash flowed the best at about $900/month until I refinanced it to buy something else.

What strategies are investors and realtors using to maximize the benefits of cash-out refinancing?

https://www.biggerpockets.com/blog/brrrr-loans-what-are-the-...Refinancing: Conventional or Portfolio Lenders vs.

Your idea of purchasing and then refinancing with a heloc is perfectly fine. 

Refinancing a hard money loan to another hard money loan is not easy and may require the borrower bringing cash to the table if the ARV does not support the rehab budget and loan payoff amount.

On top of the fact that values and rents rise during the time you own the property.....refinancing, or snowballing payments can bring your payments down on top of it.