After re-reading my question it does seem like I'm asking a market timing question, but that was not my intent. I guess what I'm looking for is validation that my though process is correct and I'm not missing something. I'm a firm believer that you shouldn't pull money from retirement accounts, but this situation isn't one where I'm raiding the account so I can afford it, I'm just choosing to store the money there. I'm new to RE and the 1% rule is very hard to find by me. It could be years before I find a property that make sense to invest in, and I'd hate to be sitting on a large cash pile with a real possibility that my plan never materializes.
HELOC is a good idea, but I just purchased a primary residence and don't have any meaningful equity in it yet.