She might not qualify for another loan, unknown it depends on if she can show it as positive rental income but with your plan it sounds like she won't have tax returns in the future to make this work. 

The higher our value, the higher the equity gain is - even if the % of gain is equal between the properties...the dollar amount is higher on the higher valued home because the property is worth more.

A seasoned investor might use a hard money loan, but that probably won't work in your case because they usually want experienced investors, 1st lien position (you already have a mortgage), and you generally cannot live in the property.

If so, then your FICO score is irrelevant.Unlike when qualifying for "accredited" status, most lenders include the equity in your home as part of your net worth.Also worth mentioning, if your net worth is 800k, you could partner/JV with someone whose net worth is $700k and together you could get a $1.5m loan.

You can build with equity and do more of a multifamily product not single family and do much better.

I want to be able to be an example for myself and my family especially my sons and pass on the knowledge and inspiration to continue with creating positive habits when it comes to money and investing in properties. 

Sweat equity.

Excellent cash flowing property with equity to reinvest.

crazy how much values have gone up in just 5 years that's an amazing price you should check how much equity you have now and repost the info I'm sure others would appreciate it. 

A cash our refinance only makes sense if you've increased your equity after you bought.In terms of the DTI issue, you can overcome this by obtaining commercial loans like DSCR and hard money financing, rather than conventional.