I'd ideally like a combination of both, but I guess it's even harder to have your cake and eat it too.

I think I will look into combining both of your guys's suggestions and do a cash-out refinance of $20k.

An $850/year payment on Plus would be coughing up the combined months rent I got for both my efficiency and my larger 1 bedroom apt.

So the statement that it is not going to happen is applicableYou are equating rare to never.

You can easily combine both sides, renting where you live while investing in RE.

I would need to qualify for a new mortgage of about 580K @ 80% LTV.Our combined TDS between our two current properties is about 34%.

Even if you find a hard money lender willing to give you 90% of cost on your first one (which is both rare and probably not wise from a lending perspective), I would want some liquidity available (not in the form of credit) just in case anything goes wrong and you need to come out of pocket for additional costs.

I was under the impression that I could combine both mortgages into a single new one and pull out my equity in both the homes.

Bump up repairs and CapEx to 15% combined. 

As far as your analysis goes:You'll likely need 6 months to refi with a new appraisal.You can probably pull repairs and CapEx down to 15% combined.