Converting a Primary Residence to Rental Property and Buying New

[Michael Sullivan]

I suppose my interest is in a cross-collateralized loan using my current paid off property to buy a new property that I would live in as primary residence. My current property has a rental income already (second level apartment) that covers the years taxes and misc expenses. If I rent out the first floor, it would essentially be all profit (~$3k per month). This property is also an ideal vacation rental which is what the second level if often used for, so income could vary but likely minimum $5k per month.

Since this property is fully paid off and would convert to a rental income with profits (assuming no vacancy issues), would it make sense to buy new primary residence of similar value using a cross-collateralized loan in order to leverage the equity and if so, would a refinance option in a year or two be feasible in order to detach the properties from each other and the lender? 

I don't have enough for down payment on new property without leveraging equity (i.e. HELOC) or liquidating other assets.

Also, i'm new here so this is my first post. I'm digging around now. Thanks for any opinions!

Michael