Should I be getting a mortgage when I own my home outright?

[Jeff Laniado]

First time poster, long time lurker.

Quick recap:

I bought a studio co-op apartment 5 years ago in the NYC area for $58,000. I got a mortgage on it (I was 22) and paid off the mortgage 2 years ago, it's not worth about $100,000. It's been my primary residence from then up until next week.

I've since got married and quadrupled my income but my wife and I are not sure where we want to live in 5 years, so we've decided to a rent a 2 bedroom apartment in the area for a year to have flexibility.

I plan to rent out my studio for $1,200 a month (taxes and fees are $400/month so great cash flow).

I also have about $100k sitting in a savings account that I would like to put into another rental property, most likely a 2 family home in the NJ area. Looking at duplexes in my targeted area at $250k, with rents that total approximately $2,500 / month.

Would it be silly to put $50k down and get a conventional 20% mortgage on the property while I have so much equity in my studio?

I've heard people here refer to "buying cash flow", is that what I'm doing here and why is that not a good idea?

Any feedback or suggestions would be greatly appreciated!