Need finance advice given current investment property and best path forward

[John Furey]

Hi - I currently own an Investment property.  My payments on the property are $2,700/mo and it currently rents for $3200/mo.  I bought it in 2016 with a 30-year fixed rate mortgage on it at 3.5% interest.  The remaining loan is $330,000 and the appraisal value for the home is currently $500,000.  

Outside of an employer 401k and the equity in this property my wife and I don't have very much savings.  We are currently renting but are planning on starting a family and would like to purchase a single-family home for us to live in.  We would also like to get into more real estate investing.  

Given that we have a cash-flow positive rental, want to purchase a home for ourselves, and also want to pursue other investment properties.  We are looking for some financial advice on the best path forward given that nearly all of our savings are tied up in the current rental property.  

Does it make sense to sell the current property and use that profit to fund both our house and an investment property?  Or does it make sense to pull the equity out of our current investment property?   

Happy to answer any additional questions you would have and any advice would be greatly appreciated!!