Cash-Out Refi - Owner occupied Duplex

[Sheila Jordan]

My property doesn’t fit in typical calculators. Details:

1) Mortgage balance remaining ($144K: $104,000 interest bearing, $40k non-interest bearing balloon payment due in 30 years. Interest 5.125% fixed rate. 
2) Appraisal $310k
3) I live in Texas, which has a weird law that owner occupied mf properties don’t qualify as primary residence for refi‘s. So I can cash out only 70% since it’s considered an investment property. 
4) Terms of refi - no points, no origination fees, 3.65%
5) Rental from other side of duplex is $1200. 

My questions: 

1) Do I take cash-out refi so I have $ to start toward my next purchase)

2) Do I just do straight refinance to get rid of balloon payment?

3) Should I sell property or hold?

My goals:1) Buy and hold real estate (preferably mfu) that will 2) Develop cash flow toward retirement in 7 years. 

Thanks in advance for your insights and opines!