I have the cash for the down payment but I’m trying not to keep it tied up if that makes sense.

If not, $210/mo, leaving $250/mo of remaining expense budget.Owner's expenses won't include vacancy, and typical assumption is 5%, so that's another $105/mo to reserve, leaving $145 of your budget.Turning one unit per year, will probably be $1000, or $83/mo.  

Once again this ties back to step 1, analyzing what your end goal is.4.

Deal Deep Dive >>Purchased Home Price: $420K Remaining Mortgage: $300K (3.85% APR)Home Value today: $700K Mortgage Payment (includes taxes + insurance): $2,200Rental Income: $3,350Scenario 1: Sell the home in the next 1-2 years to be able to exclude the capital gains from our income, and find another property to purchase with the proceedsScenario 2: Keep the home and Refi.

Other liens remain.

Then I would offer 50% of the judgment price to make it go away now instead of them having to be tied up in court.

Should I buy a small property outright, but then have my money tied up?

I've taken out HELOCs and can't remember any clauses about me remaining in the home as my primary residence, but your mileage may vary.Also, check with your zoning/building department about what constitutes a legal triplex and if one is allowed in the area.

The remaining money will be used for 20% down on a duplex or triplex new-build under my LLC, and also to pay off stupid decisions I made as a young, dumb Marine in my early 20s.

Of course you then run into the issue that the remaining party wants to either break the lease and leave as well or bring in a new roommate so they can afford the place.