I would use the funds to pay the seller his equity and I would take over his loan on the property.

If you find a deal the money can come (owner financing, Fund & Grow, private capital, hard money loans, etc).

From what you've said, it sounds like a REIT or RE investment fund would love to your services available to them on an as-and-when-needed basis.

I sent them proof of funds for a 20% deposit if we can come to terms on the price.Rent roll is 24 units at an average price of $620.  3 buildings - 2 story with 8 units in each story. 

Problem statement:My question is What is the BEST method to cash out equity, as one home has 300-400k sitting available before we get to the 80% LTV.

They must be an unrelated 3rd party who documents the process and ensures funds transfer as required. 

I personally own 3 multis in Providence and would be happy to answer any questions you may have about the area or tenant demographics from my experience as a landlord.If you have the funding to do a conventional deal that's a great place to be. 

So my business partner and I are starting out. He has experience managing properties. I am new, we have been trying to find a source of capital to get started. So far we have about 10k and wanted to use that as a down...

Get out of it...move on with the cash you have left, and recover the funds you put into the previous deal...plus profits, in the next deal.You can't play the next hand with no chips...and you can't do the next deal, with no money.Money is a verb, not a noun...when your money becomes a noun...you lose.

The money is leaving those gateway cities because the big funds cannot generate the returns their fund prospectus requires.