Didn't want to hijack the other post so I'm posting here. I've just started renting out a house I own which is paid off. I made the mistake of taking my work salary every month and paying off the house in 3 1/2 years instead of investing the money in new properties. Now that I understand the importance of leveraging debt and want to refinance the house (heloc?) to get my 75-80% of appraisal value of the house and start getting some more houses. I called my current lender for the house I live in now (30 year note) and asked if they can assist me. 

They said yes but the rate would be 7.5% since it's not my primary residence. Normal rates right now are about 4.5%. From what I've learned when you cash-out your equity like this, you are going to pay an additional 1% over the normal rates. So in this cash I could expect to pay 5.5%. However, paying 7.5% because I don't live there isn't going to work.

I've only called one place so far but I can expect to pay an interest rate as high as 7.5% percent just because I don't live there? If that's the case, I will have to either use private money or mine own. Will I always have put 20% down if I don't plan to live there? I'm looking into multi-family (2-4) residential (for now).

Many thanks and sorry for my grammar.