How to use rental income or cashflow

[Beau Benjamin]

I am a relativley new investor and now have 3 properties cashflowing.  My question is what to do with the money.

One property is my first house that I used to live in right out of college and it is still 10k until I am under the PMI. Ideally I would like to pay it down so that I increase my cashflow. However, I also want to save up enough money to put a down payment on my 4th property as soon as reasonably possible.

Is it better to save the money up as a cash down payment or what other ways are there to use the money but still creatively invest it into a future property?

I will able to pay down or save roughly 2400-3000/mth.  So my plan is to get to the 20-30k mark and then invest again for a 4th mortgage from a traditional lender.  (I still feel too new to start all of the creative financing (and I haven't finished Brandon's book yet)).

Ideally I would just pay that much down on my 1st property, removing the PMI and building equity and then open a HELOC against it in which I could use that money for a future down payment. However, after speaking with my bank (Fifth Third) they explained that I can't use a HELOC to put the required 20% down on a new investment property. I can only use a HELOC to pay for a new property in full. Essentially you can't use leveraged money to pay for the 20% down I'm learning? Does anyone dispute this or can explain it more clearly?

I guess this is my learning evolution into why people use creative financing, but the waters are still a little muddy for me.

Thanks for anyone who might offer the best way to put my cashflow to use to re-invest!