Do I sell or rent out my SFR?

[Patrick Chafe]

Hi Everyone,

I recently bought a new SFR that i will be moving into. My plan ever since buying my first SFR was to eventually rent it out. I have already done a cash out Refi for $40k+ and still have equity left in it. Based on the market (even during this Covid market) it seems i could sell it and stand to make another $65k-$75k net profit. I never thought i would be able to sell it for as much as i am being told, however based on what i could make i am thinking about selling and using that money to try and buy a multi family soon or in the upcoming recession. However, $75k sounds like a lot, but where i am from, $75k likely wouldn't even be enough for a down payment on a multi. If i were to rent it out, i could refinance to a lower rate, and could make $400 - $600 cash flow per month depending on what i could get for rent in this economy. My LTV on the house is about 75%. With the cash out Refi i got back all the money i invested and then some so the CoCROI is infinite. My fear is that if i do sell and have that money, i wouldnt be able to find anything that would cash flow as well and ultimately be throwing away a great investment because i got blinded by the big $$ signs. The way i see it, i have (3) options:

1) Sell now and hold money for upcoming investment

2) Rent for (2) years and then sell to avoid capital gains tax

3) Rent it out for a long period of time and pull HELOC for future investments

My ultimate goal is to become financially independent asap and this is the first real step into investing and i want to make sure its the right one. Any advice you have or metrics i could use to help calculate for this would be immensely helpful.

Thanks!