Therefore, a lot of people could not pay their rent and consolidated with friends, family and other means to get by, which created vacancies that put a financial burden on the property owner, who may have lost their job as well in a lot of cases.

A cash-out/refi only makes sense if you are looking to do 1 or 2 things: consolidate debt and/or have unrestricted access to a large chunk of money for whatever reason (the bank doesn't really care why you need it).

I’m planning on refinancing as soon as possible to consolidate the loans and use this as a buy and hold.

The only risk is that you may push yourself beyond the 80% LTV if you try to consolidate that back into the mortgage. 

If there's enough equity in your next purchase you could possibly pull out enough to consolidate some of that other debt but this is a point that you might want to ask financial institutions and get answers to prior to taking on anymore debt because this will allow you to either be able to or not be able to refinance and pay your private money lender off.

I've heard of strategies with people using a LARGE line of credit as their primary financing tool.  For example, 5 units at $200,000 each is their collateral for a $1,000,000 line.  When the line is paid down enough, ...

1998 for $94k (30 year loan) --- most likely the purchase loan.2001 for $126k (30 year loan) --- refinance with cash out2003 for $128k (30 year loan) --- refinance for better rate2003 for $25k ("Revolving Credit Mortgage" - 20 years)--- most likely a Home Equity Line Total liens $128k + $25k = $153K, Prop. value at that time about $191K.2011 for $140k (30 year loan) Consolidation of the $128K + Balance of the Home Eq.

I was sued by a junk debt buyer who bought a credit card debt from 5 1/2 years earlier, BUT I ALREADY paid that debt off through a consolidation agency that has since gone out of business.  

I was cash flowing pretty good on all of them so getting rid of a few actually reduced my cash flow when I paid off mortgages that weren't cash flowing as well (I also used the sales to consolidate to locations closer to my house-Now I can almost ride my mountain bike to all of my properties) The bottom line for me was that the existing income was sufficient for me to resign from my career so the extra few hundred dollars was just an added benefit to the reduced management requirements.  

If I understand correctly, you have 50k in cc debt, and were turned down for a HELOC to consolidate that debt, but you now have 50k in cash.