Refinancing Primary Residence/Family Loan

[Max Haffner]

Hi All,

I'm looking to use equity from my primary residence to potentially buy a new primary residence and rent out the current place.  I've been told by a lender that I can't refinance my current property as a PRIMARY then immediately use the cash to apply for a new PRIMARY residence loan.  Is this true?  If so, how long would you have to wait before being able to use the cash to buy a new house?  I'm in California.   

Another option that may be available is taking a loan from family for the down payment, purchasing a new place, then refinance our old primary as a rental to take cash out.  Does anyone know how family loans affect your ability to qualify?  Are there issues with refinancing as a rental property?  

Any help would be much appreciated.  Thank you!

Max