Finding people to give you money (friends, family etc) can be difficult if you have no experience.But if you show you know your stuff and have a track record it gets much easier

So unless you have a strategy for paying off the HELOC balance quickly, I think that cash-out-refi is a better option.That said, even if you do a cash-out, the lending bank may still balk, unless the the funds have been "seasoned" in your bank account for 2-3 months, as @Dave Van Horn suggested.

Does it make sense, in the cold light of day, to think that they've really got these fabulous bargains, reserved for just the select few who are happy to start off with a minus $25k balance?

So when they lend you that $96k, whatever you still owed of the $82,025 you borrowed originally gets paid off, and the balance is handed to you as cash (or, credited to your account)!

So if your closing date is 30 days out - you may still be able to shop around.Just because you have $50,000 doesn't mean you have to use it.20% of $70,000 is $14,000 with a balance of $56,000.

This house is where I have been living for the last 8 years and I have raised my children here, so it is more difficult for me to see it as a rental than my other properties.  

Do you mail a bill to each one of your tenants with the balance due for the next month's rent (including any late charges etc.)

If you want a non risky challenge try and find a deal to wholesale, it has been hard on me so far and new pockets of chaos keep popping up in my pursuit of a first deal that have taught me how difficult it can be to find a good deal or do real estate. 

I'm thinking this would be beneficial as I wouldn't have to worry about the tenant not paying rent, I would be building equity over time in a market it would otherwise be very difficult for me to enter, and I'd be able to minimize fees by finding the lowest cost property management possible (as I wouldn't need to worry about tenant screening, etc). 

He also suggests your lawyer and your CPA are on the same page  -  finding that may be a difficult task.