Should I sell cash flowing property to buy 2 more with the cash?

[Sharon McCants]

Hi, this is my first post and I'd like some feedback from experienced investors. I'm considering selling my rental property in Atlanta to buy additional properties in the Pittsburgh PA area (using 1031 Exchange). My Atlanta property appraised for $320k and I owe $65k at 6 1/2% ARM (with 1% cap/yr). Rent is $2600 and cash flow is $1500/mth.

I initially tried to get a home equity loan on rental, but due to my DTI ratio I ended up with an offer for a DSCR loan at 9% for about $150k equity and over $17k in closing costs, which I turned down.

This rental property was totally renovated from a fire about two years ago and is basically a new home.  My model tenant (best tenant we ever had) will be moving Dec 1 so I'm looking at my options.  The property has had little to no maintenance and it's in a decent neighborhood with mostly homeowners. 

I've seen a number of turnkey properties in Pgh (my former hometown) in the $100k range, so I think I could purchase a multi-family or two single family houses and possibly double my cash flow. 

I'd love to get your suggestions on how to proceed. 

[Jonathan Greene]

Never sell a high-performing property with no cap ex and low maintenance to buy another rental. It sounds good in theory to split one into more, but you want to keep banking equity on this one as it requires nothing from you and pays you money which is the whole goal of real estate investing. You are trying to move too quickly. Use your savings and equity to get the next one and keep this one.