Where to start

[Cody Miller]

I have been in my home for 7 years and have accumulated some equity and wouldn't mind using this to buy a rental 

[Nathan Gesner]

Quote from @Cody Miller:

I have been in my home for 7 years and have accumulated some equity and wouldn't mind using this to buy a rental 

Most people will recommend you cash out some of that equity and use it to purchase a rental. I disagree.

Let's say you have a house with $300,000 equity. You cash out $150,000 equity and use it to invest in a rental. The payment for the $150,000 borrowed will be $1000 or more, plus you'll have the mortgage payment on the new rental. It's unlikely to cash flow, meaning you are losing money every month. On top of that, you are heavily leveraged. If something goes wrong and you lose that investment, you may be so over-leveraged that it impacts your primary home.

I never recommend borrowing money (from equity, friends, or relatives) to borrow money through a mortgage. The best thing you can do is work hard to increase earnings, reduce expenses, and save a down payment.