HELOC vs Sell vs Cash-Out Refi

[Denis Ponder]

Good morning,

My wife and I have a condo worth $232k (appraised last month, purchased for $97k seven years ago) and we owe $67k (4.125%). We have a $100k HELOC currently on the property which I am using to remodel the condo; I put that in place before we moved. Total remodel will be about $40k. Market rent for the condo is $1,600-$1,800 according to a local property manager. My research yields similar results.

I'm looking for ideas.  We have the condo and a house we just purchased.  We are house hacking with my in-laws (yes, they are paying market rent for the guest house) and the original plan was to rent out the condo.  However, what would you do with the equity we have in the condo with a goal of scaling your portfolio quickly?

1) Keep the condo and use the HELOC as down payment money for new properties?

2) Do a cash out refi and use the proceeds as down payment money for new properties?

3) Sell the condo and use the proceeds as down payment money for new properties?

I read on here yesterday where someone said doing a 1031 exchange after a property has seasoned 6-7 years and turn it in to two properties is a great way to scale faster.  So that got my mind thinking a little bit.  I won't have to do a 1031 since we just moved out a month ago, but I am still exploring how best to utilize that equity for portfolio growth.

I am mostly interested in small multifamily properties, but open to anything.  Let me hear your ideas and what you would do!  Thank you.