Cons to this approach would be no passive income and (likely) less equity when all is said and done. 

I'm very interested in using a 203K FHA loan for financing the purchase, and rehab of a property that I would move into... and drive up the equity... eventually leveraging the increased equity to refinance & invest forward... or outright sell and invest forward.Is it possible to find a deal that matches my house hunting criteria from a wholesaler, and use a 203K loan to do the purchase? 

I've been looking at pre-foreclosure properties and came across one where heirs of the deceased owner of a many-years-abandoned home with significant equity were persuaded a couple of years ago, for substantial $, to quitclaim the property to an investor (the heirs think he is an attorney, but he's not). 

It burns up my buyers emotional equity. 

Hello,my wife and I are new investors looking to purchase our first investment property.We have excellent credit and plenty of equity in our house.

Hey Travis, sounds like a good start using that equity for a second property. 

In my opinion, they should take out a home equity loan and buy another house in the area that is a rental and let it bring some cashflow.

If two people want to buy a house to rent as 50/50 equity partners, how could the ongoing maintenance costs be structured/split, especially if one partner can't afford to pay some of the ongoing maintenance?  

With mortgage rates are at or near 5% every dollar of dead equity will cost you 5% in lost income.

Partner and I split equity 50/50, with agreed exit strategy.2.