Looking for input, rent my house out or use the equity

[Brad Fontaine]

First off, let me clarify that I am a newbie investor. My goals are to build a portfolio of cash-flowing rental properties, and then in 5 years, consolidate to one or 2 multi-family buildings.

I just was introduced to the world of investing in February, so I have been gathering information, and networking in that timeframe.  Before that, I decided to Re-Finance my house to help pay for a divorce.

Now I'm left with a 15-yr mortgage at 5% that I owe $150,000 and the home value is $243,000 (based on the refi appraisal).  I also have a full time job and a side business that takes most of my free time. I am thinking of selling the side business and using proceeds for investing (Broker said it could sell for 60-80k, I would count on the low end). So I am now looking at 2 main options, although I would be open to ideas:

Option 1. use the equity of my house that I can tap into, to buy a single family home and start building my portfolio one unit at a time. The drawback I see, is that I cant fund the entire cash purchase of a home with just my HELOC, so I would need additional funds, i.e. the business sale proceeds.

Option 2. Rent my house out - Although it wouldn't cash-flow (basically break-even), the loan balance is being paid down aggressively and in my mind, if I can break even, and start to cashflow as rents increase, than the long term equity would be worth holding onto. 

I would then look for a duplex or triplex to live in one unit and rent the others, ideally covering a bulk of the costs, and reducing my monthly living expenses dramatically. I would have to use the business sale proceeds for this purchase, but I feel like I could quickly get to 3-4 units in 1 year, and then use a heloc down the road to buy a home that I could live in, as I wouldn't want to stay in a multi-family for much more than a year or 2.

Based on my goals, what do you all think? or is there other options I haven't thought about? Thanks!