Owning property can be expensive and not having cash on hand to deal with situations that come up can put you in a really bad situation. 

I think that is not adding credit at all.  

I recently fired one of our property managers because of how bad they were and really cost us a lot of money.

I have mold in one of my units and the quote is 12k to remediate caused from water leaking from HVAC unit due to dirty air filter that the tenant didn't replace (really bad since they have cats)  I hear the cap that insurance companies pay is 5K, what a headache! 

I’m wanting to do a cashout refi so I can payoff the line of credit and move on to the next property.

Secondly, is it common to do a normal application fee for background and credit?

Credit?

Open up at least three credit cards. 

I also put all of the materials for the project on credit cards (don't recommend) so I was about $30,000 in credit card debt before I finished and paid off my debts.

Heloc cannot be used as a PITI reserve and or as an asset which is required in underwriting when buying more REI.More tradelines on credit can also cause a scores to decrease and higher DTI through the bureaus reporting.