Cashing out the equity on your current property is just another means of borrowing.

You could even set up recurring payments, etc.

If your in an area with a lot of investors who want to maximize cash flow or where first-time home buyers need more income to get into a starter home, they might have a higher value.

I have a tenant who has never been able to make rent on time, they are typically making partial payments throughout the month to get current on rent before the start of the following month.

It's likely accurate because most lenders aren't inclined to allow someone to assume responsibility for payments without their approval.

$1775 monthly payments to seller, straight to the principle, with a 48-month balloon.

While you may not make significant passive income renting the other side or the other three units, you can probably cut your living expenses in half or even live for nearly free in a 4-plex.If I had to do it all over again, I would have taken this approach at your age and purchased a 4-plex every year or so with minimal down payment.

A HELOC is what I was looking to do, but would that be used just as a down payment? 

Unfortunately the high interest rates makes finding a cash-flowing deal quite difficult.

I suggest you research cap expenses and cash flow on BP.