My current plan was to take out around 250k by refinancing to a 550k 7% loan from a $290k 3.25% interest loan.

Another option was using equity to buy a 3rd home with FHA (the first 2 loans were under VA).

Build Rehab Budget into Loan. rather than fund from outside.

Does Lender need a lending license to provide a private loan for a residential property in Texas, considering both the lender  and the borrower are California residents?

If I was in your shoes, I would have them be actual partners and guarantee the loan with you.

@Caleb Heimsoth They just finally responded saying they are not willing to change the charges whatsoever.

Loan rate/terms get complex once you hit that 5+ unit property, so you'll ideally want to work with someone who can help on both sides of your plan.I'd also consider MTR as an option for a $70K property.

In my current situation I don't have any capital available, and have a very large student loan burden. 

There you will be asked your criteria and then after answering a few questions you will be matched with 3-5 agents or loan officers in your area.

I would definitely speak to a tax pro before finalizing any plans.