There are a number of strategies, terminology, and market factors to understand.

What is your strategy for maximizing its potential? 

Is using a HELOC for purchasing and then refinancing a viable strategy, or does the impact on DTI make it less feasible?

The only issue is based on my research once I pay off most of my debts and save up some money I'm not sure where to start.Since I'm not able to save up $10K plus to buy a rental I am looking at for alternative investment strategies to help build up my initial investment (ideally $30K-$40K).  

All bets are off when credit seizes up.

The first tax benefit of real estate is that the cash-flow and appreciation grow tax free(in general).Cash flow will likely be offset by depreciation and appreciation is not taxed.If you are making 8% on real estate(combined cash flow and appreciation), you money will double  in 9 years.If you make 12% on real estate, your money will double in 6 years.There are other strategies in real estate(time involved in real estate) where you can create 'paper-losses' to decrease your W-2 wages, interest, dividends.I normally don't like this route too much as I think people can focus their time and attention more on other tasks that can generate a higher hourly return.Best of luck.

Is this a reasonable strategy?

@Cooper Moran, there are almost as many real estate investing strategies as there are types of people!

I am a big believer of leveraging the 5% down strategy and moving into the property for 1-2 years.

I'm starting to build a business to grow my rental properties and would like to get some advise on what's the right asset protection strategy for me as a starter.I live in CA and currently have 3 rental properties in CA, 2 are long term and 1 is short term.