I believe the 1% rule is an EXTREMELY blunt instrument.
Depending on the specifics, $1500 (or better $1800) could barely work on a $200k property if you have a situation where expenses are going to be extremely low (self-management, good interest rate, no HOA, tenant pays all utilities, relatively new property with no repairs or upgrades imminent).
If you bought a $200k home with $40k down (assuming no closing costs...), you'd need to cashflow $3.2k per year to have a 8% cash return on your cash investment. In your case the HELOC hurts you.
That is a monthly net of just under $270 per month after ALL expenses. If you could get rent of $1800 per month, then you'd need total expenses (including deferred maintenance, management fees, utilities, etc, etc) to be below $1530 per month. After $750 for P+I on the mortgage, that leaves $780 for everything else (taxes, insurance, vacancy, repairs, deferred maintenance, etc, etc). All those expenses are very location, tenant, and property-dependent.
If you only brought in $1500 per month rent, those same expenses would need to be below $480 (probably not possible?) to hit 8%.
On the plus side, there's also equity accumulation - $2800 principal paydown in the first year based on that mortgage (although if you do sell, you're going to spend 4 years or that equity in transaction costs/commissions), and tax benefit (although depreciation is recaptured when you sell, so it is in some ways more a deferral than a deduction).
Can you do better than that? Sure you can. But that's also nothing to sniff at. What is your alternative investing plan (i.e. opportunity cost) for that money? You can certainly do better than $1500 rent on a $200k property, but you could actually earn a reasonable return with the right property/location.
I definitely agree with starting with one property.
[Edit] mis-stated net operating income