We have tried in the past few months but our primary isn't worth enough to allow to use it as collateral.

Basically you go to the bank and ask for a loan, offering the property as collateral, and in exchange for the lump sum of cash, you are required to make monthly payments on the loan (sounds like a mortgage right?).

They would be have a lien on title, as collateral, until I pay them off completely, correct? 

Is there a way to pull out equity and use it for a rental property without using my house as collateral?

As long as the property being bought isn’t used as collateral then it’s ok, right?

You can use 401k holdings, stocks, RE as collateral for proof of ability to pay.

Show the seller what he will receive over the period of owner financing --if seller took back $100,000 @ 8% interest, interest only payments, paid monthly with a balloon at the end of 60 months - would look like this 8% x $100,000 = $8,000 a year ($666.66 a month for 60 months = $40,000 plus the principal balance in a balloon payment of $100,000 - so the seller get his equity of $100,000 plus $40,000 in interest) these facts can be very motivating.Seller needs to know about capital gains and the benefits of seller financing and installment reporting.Seller can use the financing note as a down payment or other real estate or sell the note at a discount.Seller can split the note - 4  $25,000 notes or 2 $50,000 notes - again these notes can act as down payments  deposits on other real estate, sold or retained as monthly income or given to relatives as gifts.When seller financing is accepted - you may want to consider the following agreements or clauses:Always build in a discount in the event you pay the note off early (big savings here).Always make the mortgage a First Subordinated mortgage - this means that if you refi - you can place the seller's mortgage in 2nd position - since a lenders usually wants to be in first position.Make that mortgage fully assumable with release of liability - that means when you sell the property, your buyer can assume it, and you are released from the obligation (this is good)When selling the property - you can do a wrap-around - meaning if your interest to the seller is 5%, you can wrap the mortgage at a higher rate - like 10% - that means you are making 5% on money you owe - this is sandwiching the mortgage (this is good - never stop negotiating)Build in a clause that allows you to walk the mortgage to another property with equal or greater equity - this is called substitution of collateral.

When the property changes ownership, it will trigger the Due on sale clause or termination of the HELOC because you no longer own the collateral.

This balance can be paid via borrower's personal capital, other investors' capital, second mortgage or Gap lenders, Seller financing/carry back, cross collateral, etc.

While anything is possible, in this situation I don't see a lender allowing those two assets to be cross collateralized.  9.