@Dan AudinoFor path #1, is your eventual goal to rent out the property?

First, all properties that appreciate the appreciation is based on the property value, not the equity. 

If I got a home equity loan for Property 1 and used the proceeds as downpayment for Property 2 and then got a 2nd loan for the remaining 75% purchase price for Property 2, when I sell Property 2, can I use the Property 1 loan as part of the cost basis for computing Property 2 capital gains?

Depends on which property you pull equity from.

I had to get a home equity line for about $20K, which put my first and second mortgage at $153,600.

What’s the property’s current value and how much equity do you have?

Hi BP community - I'm an investor with 3 SFHs in the Nashville area looking to acquire my first small multifamily property (2-4 units).I'm trying to determine the best approach for the 25% downpayment, comparing using cash that is currently sitting in a high yield savings account to funds from a HELOC on one of my properties.

You might want to consider using your equity in the land as your contribution to a partnership with someone that brings that sorely needed experience to the table.

I added value by rehabbing both of the units inside the property What was the outcome?

Meaning they buy the property at once.