People and institutions have short memories, but apparently not short enough to forget that lesson.Even if you can't pull cash out, the math seems to argue in favor of doing the deal (rolling both mortgages into a bigger primary residence mortgage).Just be sure to discuss it with your family first since they're effectively part of the equation and you don't want to be caught by surprise if they say, "great, no mortgage on the property means no payment needed from us."

For example, financial institutions may tighten lending standards and make it really hard to finance properties.

Is the federal government going to pay us (landlords/rental property owners) back for all rent not paid during COVID due to the institution  of a federal moratorium? 

@James Ma that is what we thought.

You aren't likely to find an institutional lender that will lend 30K or be in second position. could you clarify what you mean when you say "I am not looking to refinance as I am closing within the next 3 weeks or so and there are harsh penalties for early payoff of the loan"?

This is also why a lot of investors turn to hard money for short term loans on properties that other financial institutions won't lend on.

No institutional lender is going to hand you $119K (70% LTV on ARV) secured by a $50K property. 

It really just takes the right team, and a good loan officer and lending institution that does a bunch of these....not dabble, but specialize. 

It will be hard to get financing from a traditional financial institution which I am sure you are aware of, unless you already have some wealth accumulation. 

@Wayne Brooks yes Fannie Mae changes their rule from 4 properties to 10 properties in 2009 but most institutions still stick to 4 properties since the guidelines are different for property 5-10.