Have some money to play with, looking for advice

[Andrew Merritt]

Hey all, I just joined BP the other day as I've been looking for some info on REI. I've got about $40k in mutual funds (non IRA so I wouldn't have to pay penalties to withdrawal, maybe just capital gains) that I could play with. I just have that money growing for retirement right now. I also have probably about $50k in equity in my home that I live in.

What should I look at buying with this amount of money?  Should I just use the 40k that I have invested?  Should I take out a home equity loan?  How many properties would you recommend I buy?  

I was initially only thinking of using the $40k to put 20% down on a house worth up to $200k, but it seams that a lot of people here buy multiple cheap houses with very little down and that's sounding more appealing to me.

Any suggestions are greatly appreciated