I would suggest you do both of what you suggest - meaning get either a new mortgage (more conservative route) or HELOC on the townhome and use those funds to buy your next investment property.

What type of properties are you looking to buy?

Buying a house near the comps would be a bad deal since they would be buying at a premium.

So if 3 siblings all buy a house together and all live in it when they sell up to $750k can be excluded.If married only one person needs to meet the ownership requirement-but both must meet the use requirement. 

The majority of the business I do is buying small multi families and identifying the towns that are more favorable for investing. 

So did you buy the $15,000 course? 

Are you agent yourself and what makes you say that you'll avoid buying a home under 1000 sqaure feet again? 

Personally when buying rentals I tend to buy in neighborhoods that I feel like I wouldn't personally mind living in and when I look for tenants I try to look for people that not only pass my screening but also I personally don't dislike.  

@Makani Donaldson it all depends on your investment goals.If you buy a Class A rental, it'll usually have negative cashflow, which will be hopefully offset with appreciation and better tenants.If you buy a CLass C or D rental, it should have pretty good cashflow because you may not realize much in appreciation and you'll have a lot more problems finding good tenants.

Investment Info:Single-family residence buy & hold investment in Riverdale.