Do you know how to prioritize repairs and various expenses to maximize annual deductions?

We let it slide, couple months go by and rent stops coming, we tell them to get out(legal steps, of course), they refuse, we have to evict them, they fight the whole way in order to maximize the time they get free housing.  

And you should be maximizing those funds to grow your wealth in a tax deferred manner instead of using it to help you grow your taxable wealth.

so the cash flow using the HELOC even though it is on your primary is the better choice to get you started and maximize your monthly cash flow and minimize expenses till you either re-sell or rent out. 

If they are a pain to deal with the only real tool you have to get rid of them with a 4 year lease is maximizing  your rent escalation.

Ken McElroy has two great books on apartment investments and one on property management: The ABCs of Real Estate Investing: The Secrets of Finding Hidden Profits Most Investors Miss The Advanced Guide to Real Estate Investing: How to Identify the Hottest Markets and Secure the Best Deals The ABC's of Property Management: What You Need to Know to Maximize Your Money Now Also see Ken's BP interview on Podcast 052: Buying Apartment Complexes, etc. here: http://www.biggerpockets.com/renewsblog/2014/01/09/bp-podcast-052-raising-millions-ken-mcelroy-rich-dad/ The best way to learn the apartment business is to get your brokers license and a property management job to feed you while you build your sales.

In the first case, maximizing equity is big as it will make the biggest starting number and therefore appreciation is very important.

I hesitate to give you more advice here b/c I'm really not qualified to do so but in general- Your best bet here is to keep really good books and then discuss with your accountant about other ways to reduce your tax liability- ask about non-reimbursed (partner) expenses - this might be an area where you can maximize your deduction for time spent working on your business or traveling on behalf of your business, etc

The challenge is getting into the right property to maximize that ROI. 

With reduced overhead you'll be able to save up quicker for your next investment.Personally, I would look for a SFR with an ADU or a small multi family and live in the smallest unit to maximize your rental income.