Is start-up capital proportional at market highs and lows

[Thomas J. Clifford]

Newbie post here as I still tackle some of the basic learning concepts before buying my first investment property.

I have *some* money saved up (10K, which is not much at all in my market where 3/2's go for 140-190k). I'm looking to get started but at this time I don't have enough of a reasonable buffer that is recommended for first time buy and hold investors. I have been strongly considering a cash-out Refi of my home which would net about $50k of capital to work with. I've also been advised by an investor I consider a possible mentor to look into a HELOC to start making moves with.

My question is this: I feel like we're looking at being at the height of the market (Yeah, I know nobody has a crystal ball - but pricing in my area really just seems higher than it should be at). If I do a cash out refi - that locks me in at the property value at what *I* think might be at the height of the market, right? Does that put me in a tough spot when the market starts to correct itself, and my primary resd. starts to lose value compared to the refi I might take out on it? Is it better to refi when interest rates are higher, but values are less inflated? Does that even make sense, or am I not seeing this from the correct perspective?

What about the HELOC option? Does anyone have general advice or info on how a HELOC might be impacted when it is opened when the market is high, but mostly operates during the down turn? 
 
What options might you recommend (Short of straight cash) that fare best when the market *might* be at its peak before dropping? What were effective strategies that investors used in 07-08 that helped keep them insulated from the dropping market?

I HATE being the guy who asks for general answers while also being vague, but I'm more interested in the basic mechanics of how these options behave when they start in a high market and then operate in a falling one. I appreciate everyone's insight!

Thanks in advance!

T.