If you do not want to use the equity in your primary residence, most likely you will borrow from a bank and buy the property with an investment property loan. You will pay a higher interest rate than you would for a first loan on your primary residence and likely have to come up with a higher percentage of the purchase price for a down payment. Some portfolio lenders offer smaller down payments and different terms, but they usually want to work with experienced investors with a solid track record.
Qualifying for investment property loans can present a problem if you do not enough income without the rent to support both mortgages. Underwriting guidelines vary, but most lenders tend to discount the contribution of the rent to the income available to repay the loan.
Here is a simple example. Say you wanted to buy a duplex for $200,000. If this were your house, you would put 20 percent down ($40,000) and get a loan for 80 percent at around 4.5 percent interest. As an investment property, you would likely have to put 25 percent down ($50,000) and pay 5.5 percent interest. You would have to qualify for your existing mortgage payment and the investment property payment on the basis of your other income and some portion of the income from the duplex. The percentage of duplex income used could be from 0 to 75 percent, depending on the underwriting standards of the lender. Make sense?
You would be well served to attend meetings of your local real estate investors association and read up on investing in real estate and being a landlord. Also, ask about investment property financing at your bank. The more you learn, the closer you will be to writing a check with confidence.