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.

Then, if you can trend over time you'll want to see where the "path of progress" is going/moving and attempt to buy in that path of progress to gain some appreciation in the future.

We also have many unique buyer incentives where an investor can get up to a 10% price reduction to come into immediate equity, or get that 10% as a cash back at closing to reduce your down payment and increase your ROI, or buy rates down into the low 4s on 30yr loans to maximize cash flow.

The current average rent on the new buy is $925.

I would both buy a property to get your feet wet and at the same time make a plan to scale.  

Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?

A lot of forum members are experts in their respective fields related to real estate investing, whether that is real estate sales, wholesaling, flipping, buy and hold investing, lending, self-directed IRA and Solo 401k investing, or tax and legal guidance.There are some pretty nice discounts on many products and services offered as Perks to BP members that you might want to check out: https://www.biggerpockets.com/perks/proIf you haven’t been to it already, the Bigger Pockets blog features links to their fantastic podcast and many great articles: https://www.biggerpockets.com/renewsblog/The site has quite a few tools that can be helpful for new members.

I would recommend you look for a good neighborhood to buy a multi family in.

Investment Info:Small multi-family (2-4 units) buy & hold investment.

However, can you buy real estate without using any of your own money?