Now for my out-of-pocket expenses:Down payment: $7500 (Hard money loan 90% purchase price 100% rehab)Closing costs: $6500Inspection: $400Agent's commission: $5200 (didn't raise purchase price of house with seller concessions, so that money didn't apply to the commission sadly. won't make this mistake again)Holding costs: $1300 (one interest-only payment of $770, roughly $200 in utilities and $360 in insurance)Total: roughly 21 grand. 

More specific: He stole months of rent and utility payments from a tenant (and threatened to evict her!)

Remain responsible for rent, utilities, and other terms until a replacement tenant takes over.#2 can be a bad option in the middle of winter when renters are harder to find.

Rent out part of the space at least to help pay for mortgage and utilities.  

From time to time I will hear of people who utilize it well and gain business from it. 

This step would include understanding City zoning & platting, locating utilities, researching City codes for development requirements (big ones include detention), etc. 

I see a lot of posts for furnished monthly stays where owners are fretting over utilities and how to ensure a tenant doesn't abuse their being provided.

My question is - what is the best strategy for utilizing my home equity and buying my first rental?

Utilities are typically $350-450/month for a 3/2.If you have any more questions feel free to reach out!

This way you're able to utilize conventional loans, each of you are allowed 10 of those.