Sell Rental Property or get HELOC for funds?

[Kathryn Daniel]

We have a single family home we rent out and generates $400/month net in profit. I think it's a great investment and always planned to keep this house. Right now we are looking to purchase another rental property and need funds for a down payment and repairs. We've thought about getting a HELOC on that house since our mortgage balance is around $71k and it's worth around $140k. We bought the house as a foreclosure in 2012 (I wish I had bought more houses then!!), lived in it for a few years while fixing it up and purchased a new primary residence about 7 months ago that we now live in, and are fixing up. I've been talking to a lender who can facilitate this for us at the same or lower interest rate than we have now, but he said that since they can't be a 2nd lien holder on an investment property, we could still do a HELOC but pull funds out to pay off the first mortgage so that they would be in the first position. Then we would be responsible for taxes and insurance outside of an escrow account. This would give us approx $30k with which we could fund new deals.

My husband brought up the idea to sell the investment property instead which should net us somewhere around $50-60k after closing costs etc.  That way we could purchase even more property.  

I am hesitant to do this because I think the property we have now is an excellent investment and am doubtful as to how long it would take for us to find another deal that good.  What would you guys do in our situation?  Are we missing anything?