Not sure what to do with a house with equity and need advice

[Jeremiah H.]

I purchased a SFH for my primary residence about 3 years ago via short sale. Purchase price was 133K, I put down 20% with a 2.99%APR on a 15 year loan. I owe around 90k on it currently and it's worth roughly 180k. We have since moved so it's no longer our primary residence. It rents for $1300/month and is a little under market value.

I'm trying to figure out how to use the equity in the house to purchase additional properties. One issue is losing my 2.99APR if I go through a traditional refi. At this point I would probably end up with a 5% 30 year being as it would be an income property and not primary. 

It's been difficult finding someone to take a second mortgage on it so I can keep the 2.99% on the 90k I owe currently. I've thought about selling it since it's not an ideal rental. If I sell it I assume I would have to pay long term capital gains on the roughly 50k profit or do a 1031. 

Anyone have any ideas on what to do with this property? To this point I've only been doing buy and holds and have yet to sell a house.

[Vincent Polisi]

@Jeremiah H., if you owned and lived in the home as a primary residence 2 of the last 5 years, you have a capital gain exclusion of $250k (gain) if you're single and $500k (gain) if you're married filing jointly on combined lien amounts up to $1.2MM on a primary and secondary residence. 

So, it would appear that you have no capital gains issue since its tax free. So, a 1031 isn't necessary and worrying about a 2.99% interest rate is ridiculous. What's the cash flow? 

You can sell the house and, it appears, take 100% of the profit tax free. Or, if you want a long term hold, refi it and cash flow like a banshee. 

Equity is the absolute worst enemy of investors so stop worrying about it and the interest rate. 

Equity doesn't buy groceries. Cash flow does. 

Analyze the cash flow and make your decision.