Long term investors will eventually have a large loss claim so appreciate you sharing if you can.  

While I love the idea of eventually owning a paid-off primary residence, I’m debating whether it’s smarter to sell our current house and use the equity as a down payment on the new home or to keep it as a rental.

Also, expect deferred maintenance.Your #1 concern should be, can you fix the problems the seller has or will you eventually have to dump the property also?

She was facing charges but they eventually got dropped and Lee's people fixed everything, got it on the market and she got like $50,000.00 from the sale proceeds. 

I currently own two properties in California, and at 21 years old, my goal is to continue purchasing properties and eventually pay them off to achieve financial freedom.I’m considering two options:1.

The biggest thing to consider is 85% of all people who take out a Heloc will eventually do a cash out refinance in 3 years to consolidate it anyways.

Consistent with the advice of @Jo Bradley , if I could get through the first couple years financially, keeping current home seems a lot easier than long distance investing...and at least I know what is wrong with my current home (I.e it will eventually need new roof etc). 

If you are going to be active, and have high conviction in a project with a clearly defined entry/exit strategy then using a HELOC is one of the better sources of capital.But, I continue to have my stance that, on average, folks who use a HELOC to fund the down payment for long-term investments will eventually find themselves in a situation where their portfolios drain their personal financial situations, rather than fueling them. 

Eventually, you will see a property pop up that is an outlier in your favor, and you will be the only person who knows that market so well as to be able to strike quickly.The 1% rule had a value at one point, maybe as a screening tool, but it could never compete with the specialist who has done the reps.This is spot on. 

Personally I am looking to grow in RE and buy a 2nd home in LA/SD and eventually buy a multifamily complex.