Re-appraisal on first home for money down on investment property

[Matt Rath]

Hello! Lot of things at play here so hoping someone can help me understand if I'm on the right track or not. 

I bought an older / out of date duplex in a nice neighborhood with 3 beds 2 baths upstairs and 1 bed 1 bath downstairs. It's 1750 sq ft and I'm almost done remodeling the home but have done all the floors, new kitchen, bathrooms and a local real estate agent said I'll probably hit the number I need to reach 20% ownership. Bought for 175,000, I have 160,000 left to pay out and expected value is around 200,000. My mortgage payment is 1,000 and the upstairs rents for $1400-1500 while the bottom rents for $650. 

My goal is to buy another duplex much like this one that cash flows and fix it up as well. This is where I have questions on if my plan makes sense. I don't have a lot of liquid cash right now so I wondered if my re-appraisal hits 200k, Can I use that 40k of added equity as a down payment on a second duplex? I'd be able to show around $2000 in lease each month from my current home plus whatever portion I'd rent out in the new duplex. I head that I can purchase a second home under a "small business loan" and a HELOC for 15% down. This would help against the 20% needed for an "investment property."

My question is does this plan make sense? And also for a newbie, what does the cash out / HELOC / refinance ease look like for me? Is it more complicated than I'm assuming it might be even if my home is valued at 200k. Thank you for any help or input!!

Matt