New investor looking for financing advice

[Annie Weeks]

Hello! I recently made the decision that I am ready to jump into real estate investing, and I am very excited. I have been working on educating myself through the podcasts, forums, books, Youtube videos, talking with friends and family who have real estate investments, etc. I have been analyzing deals in my area and have looked at a few houses with a realtor (friend) to get an idea of what is out there. I live in St. Paul, MN and have really been focused on my area and the surrounding suburbs because I feel very comfortable with the market here and plan to self-manage starting out.

My initial plan for financing my first investment was to do a cash out refinance of my home and use that money as a down payment. We purchased a foreclosure in 2013 and have a pretty significant amount of equity as the market in our area has skyrocketed. Just a little more background, I do have an emergency savings fund, which could be used as cash reserves (is this even a good idea?), as well as a HELOC, which could be used for any initial rehab/repairs. However, as I continue to learn, I am wondering if cashing out on my equity is the best option, or if I should pursue another option, such as private lending.

There is a duplex in my area that I have had my eye on for the last week. For whatever reason it is not selling, which makes me think I could go in with a low-ball offer. Obviously, I will need to have the cash on hand before making an offer, so any suggestions, advice, or other insights would be much appreciated! Thanks!!