First rental buy: Use my own savings or refi my current home?

[Brin Dillon]

Hi BP fam! So I have currently been diving down the rabbit hole of RE investing and I’m hooked! I love soaking up as much info as I can everyday but I’m still a little confused as to how I should start off with my first rental buy.

I have some of my own money saved up, about 70k but I also have my equity in my current home I own. I have about 80k in equity. (Bought the home for 261k, it's paid down to 234k and it's worth around 310-320k). We still don't technically even have 20% paid into the loan so we still pay PMI insurance every month.

I guess what I’m wondering is, is it smart to take out the equity on the home when we still don’t even have it paid down 20% to purchase another property for rental, or should I just use my own cash for my first one?

Thanks SO MUCH in advance for any and all help 🙏🏼