Cash out of California?

[Ben D.]

I have a SFR rental property in Fontana, CA that is worth 390k and I owe 255k. I am 1 year into a 20 year mortgage and have had same renters for 6 years no problems. I am not cashflowing, but obviously trying to pay down principal. I have entertained the idea of selling, doing a 1031 and find multiple properties out of state that will provide some cashflow and potential appreciation. I also currently have one SFR rental in San Antonio that is cashflowing 250/month with a 20 year mortgage. I have looked at Dallas, San Antonio, Indy, Florida, etc.

Obviously, I could leverage into many more rental homes in a variety of markets, but I am a part-time investor and doubt my ability to find great deals in out-of-state markets, especially under the time constraints of a 1031.  I would probably be looking at turnkey solutions, or using my property manager / realtor in San Antonio, who has served me well.

I am most interested in hearing opinions about the benefits of holding my current position longer / forever versus exchanging for cheaper multiple units in another market with less potential appreciation (Cashflow vs. Capital appreciation).  I know it is an individual investor's preference, but hearing others' ideas on what I could do with a 1031 would help me process various potential investment scenarios.

Thanks