You could use her money as a down payment, granted you do all the leg work, and split the cash flow ( or future expenses) from day one.

No one knows what will provide the best return in the future. 

In my opinion, keeping the home and getting that HELOC out would allow you to have a future asset which an increasing rental market (more potential cash flow), give you funds to proceed on your next deal and invest, and the diversification in your portfolio to shield you from some market risks. 

In the future, I think you could go about giving this type criticism in a better way versus making me feel incompetent.

As a BP fan I really enjoy learning about real estate and plan to, in the very near future begin investing myself. 

Sorry, I'm obviously new to the game and just want to make sure I'm more clear in future posts.

I also do not have any debt and like you mentioned, I'm looking for cashflow properties so that one day I can retire early and comfortably without relying on my 401k (as an example).I'm looking to buy my first (or maybe first 2) RE properties in the near future but I'm trying to learn as much as I can, find the best strategy that works for me, and build it up from there!

There is also now snap/click vinyl planking as well, a little more expensive but faster to lay without the glue mess.Not sure on the pricing without seeing what needs to be done and you certainly dont want to replace the mess you have now with a future mess. ( same material )  As @Jaron Walling ceramic is another great option but going to cost you quite a bit more upfront.  

I would be curious to see what your plans are, I think the Logan Heights area will be the path of progress in the future. 

@Doug DanoffWelcome to BP, and congratulations on making the decision to invest in your future via real estate.I have written a few blog posts that may help you get started here on BP, and with your investing.