This is your first loan, so you have no exp but let's say your credit is good, maybe 750.  

Here's my scenario.My husband & I are renovating a house that we own outright (approximate worth is 350k).....we are interested in taking money to finish the renovation & also we have an interest in buying another investment property.

Definitely take it into consideration in your DSCR calculation.

Depends on your needs!

What factors influence your decision—profit margins, market demand, or investment strategy?

Sounds like you've put a decent amount of thought into your plan and I think it's a pretty good one.

So there won’t be any problem with freezing, only a problem with you getting your money back.

One other note about condos in PHX is that your exit strategy needs to be accounted for even more with condos.

Your looking at the wrong markets. 

I had my own moneyHow did you add value to the deal?