Lenders want a strong asset as collateral, a strong borrower with experience in the business they are proposing, a good area where the asset is located, etc.

Basically, the collateral they have is that they have first access to all money to satisfy your debt after your seller's closing.  

Only thing is that recorded deed of trust is in default by the first (i am third) and can no longer be used as a good collateral.  

If you only have a portion of $X and you wish to use the property as collateral for the portion needed, that is a purchase money mortgage.  

Has anyone recently had luck getting a home equity loan or loan collateralized based on rental homes?

I was thinking the same to also be able to use those as leverage for a portfolio loan or a LOC using them as collateral.  

I usually use lenders/investors who use the property even if seller carry/owner financing as collateral or down payment but the lenders I have don't lend in TN.

Are you making a personal loan to a lender who is using one of his or her notes and deed-of-trusts as collateral?

Please note that lenders will have to re-order appraisals on the remaining collateral if release prices are not set at the beginning of the loan.Also, all properties should be in the same state and must be all owned by the same entity.  

Patti you can avoid the obstacle of non- recourse financing by purchasing multi family properties of a size where the lender requires no collateral other than the merits of the property.