I would figure out my risk, return, and liquidity preferences and then invest in a diversified portfolio that matched, knowing that real estate is going to be a significant part of that portfolio, and that it usually sacrifices liquidity for higher returns and lower risk. 

You need to keep some liquid cash, so maybe only use $85k of the money.

Hi BP,Had an interesting convo with someone the other day debating the Solo 401k option for self employed individuals or taking the annual tax hit but keeping your cash more liquid to actually purchase rental real estate to reduce your taxable income with every additional acquisition .  

Strong liquid cash (couple hundred thousand sitting in the bank but they want to keep that available as he gets his company up & running). 

The note of the build is $350k with the estimated value of the new home to be $455k.My question is if I should establish an equity line of credit up to $80k to use for purchasing rental properties out-right then refi on the rentals, or just refi the new house to have that liquid cash for the same purchasing power? 

Taking a loan against that would be another way to free up capital without liquidating your long term assets.

The down payment, closing costs, and your typical required liquidity buffer will add up to a total around 45k-50K.

Get the upside of inflation through rental and price appreciation without putting yourself in a liquidity crunch if the unexpected happens.I agree that inflation is likely to run hotter than it has over the last 10 years, and residential housing will likely run above overall CPI for at least the next 5 with the strong demographic support from Millennials moving from apartments to single family homes, but I would not expect 5%+ inflation for very long. 

Appreciation is unpredictable and not a great long term investment strategy, in my opinion; it also means that your asset isn't liquid and not producing cash flow.

You're taking cash out of your bank (liquid), and putting it into the floors of a house (solid).