HELOC or Sell Rental to purchase more units

[Lonnie ADams]

My wife and I are currently in the process of flipping a house and we own another.  The house we are flipping we paid cash for and are paying cash to rehab it.  When the flip is done we will be into it for around 180k and current comps have the house between 300-330k(plan to sell it in around 8 months).  We also own a small home that has comps around 135k and we owe 43k on it.  We rent it out for a cash flow of around 100.00 a month after mortgage, taxes, vacancy, repairs all things like that.  We could get a bit more out of it, but we are considering selling it to use it to buy a 2-3 multifamily unit. 

The question I have is should we sell it and use the cash to buy more than one multifamily unit over the next couple years as ones that make sense come up, or should we use a HELOC or some other type of financing?

We enjoy and want to continue to do live in flips for a couple houses but want to get into rentals as well when they make sense.  The one thing we are concerned about is when we sell the flip we would feel rushed to find another property to live in as we don't want to move into the rental and having cash would give us some flexibility over the next 6-8 months to find another property to live in.

[Jaysen Medhurst]

@Lonnie ADams, I'd sell the SFR. Your Return on Equity ROE) is only about 1.3% and that stinks. In my market that $90k+ could get you one or two 4-unit properties, each cashflowing ~$600/month. Heck, shoot for a larger property, maybe 5-10 units.

Do a 1031 exchange to avoid capital gains.