A few years ago this seemed like such a good method, but with rates, prices, and supply where they are currently, I am not sure we can afford it or if this is our best option.

I have good credit and enough money saved up for a down payment.

There's other methods you can look into like cash out refinance or DSCR loans. 

Sara,When you buy an investment property the Bank/Lender lends you the money for the purchase minus the down payment.

During that refinance you can transition it into an investment and Vested in an LLC either through closing or a Quit Claim Deed after you close at the County.It's kind of a Bank/Lender Loophole because you take advantage of the 10% down Second Home/Vacation home down payment.

As it stands, if I were to keep this house I would need to rent for a few  years to be able to comfortably afford another down payment (I'm in a very HCOL area now). 

@Doug Davis when most of us do this rent-by-the-room method (otherwise known as "House Hacking") we are very discerning about who we rent to.

(Max vacated rents - your monthly mortgage payment) = +/- net cashflow.

It seems like a good deal to me and there are ways to fund a $10k project and defer payment.

We have many beach condominium options in Orange Beach/Gulf Shores that qualify as a second home investment with programs with as low as 10% down, so you don't always have to come up with the larger down payment, but some buyers choose to go with a higher down payment to get a better rate.