It can be at risk whether it is in the bank or under the mattress.Investing in real estate is the best way to build up more wealth and cash to buy that dream home.

So I would recommend you start your search in two main areas :  1) "bank foreclosure sales"  These are for properties foreclosed by the banks that hold mortgages in houses where the owner is not making payments.2) "tax sales".

Local banks are more likely than big ones. 

Call and talk to anyone connected to real estate: Agents, Wholesalers, lenders, banks, attorney's, surveyors, contractors, etc.... and ask a lot of questions.

In the podcast I hear a lot about building relationships with local banks and leveraging those relationships for future financing and creative financing options.

A commercial bank would be able to support a loan like this and they don’t care where the down payment comes from.  

Now I've "recovered" that liquidity and now that my proportions of principal and interest (PI) every month is much more in my favor than the bank's favor, it's just like having saved up all this time to go out there and buy another property.

It sounds like an easy choice - if you don't like the numbers, the realtor and the basement flooding is simply icing on the cake I'd find another realtor who has good reviews/was recommended to you and explain the situation to him/her. 

Would it be best to go to a small bank or credit union?

Does anyone have infor on banks or institutions that offer real estate IRAs?