How to pull more equity out of my house to purchase a rental

[Damara Montaque]

Hello BP!

I am a 24 year old aspiring buy & hold real estate investor looking for some advice on how to get my first investment/rental property here in Florida.

Here’s my situation:

Myself and my mom are currently living in our house free and clear (no mortgage). I wanted to tap into some of the equity in the house to start our real estate journey (keep in mind we don't make a ton of money annually). The house is currently valued at over $400k. I went to my local credit union this past weekend and asked about possibly getting a HELOC or loan to use to purchase the rental property, between mine and my moms annual income we only qualified for $50k. I have a side hustle that generates way more income but I am unable to use that because it's only been a year so far. Some other options we've considered are:

• selling the house (worse case scenario)

• renting out the house so that it pays for itself

• use the $50k equity to purchase another investment property

My question is, should we just use the HELOC or loan that we qualified for as a sufficient down payment for a rental property? My concern is that because the market is up right now we won't find anything that will be sufficient with a $50k down payment in the area. If there are any other options or advice that anyone can provide I'm open to hearing them

Thank you!