Sell or Rent/HELOC in Washington D.C. Suburbs?

[Tim Kane]

I keep going back and forth on what I should do with my current residence.  The situation is as follows:

We have a 20 year loan on our primary, which is worth 535k.  We got a 20 year note because we thought this would be our forever home.  Even though my home is in a mature single family home community, some not so desirable homes/communities feed the area schools which make them not great.  This is the reason we are planning to move into a better school district.  We have already been pre-approved, even with my current residence being held against me.

The rate on the current note is 3.75% and we owe roughly 380k. PITI is just at $3,000. We have lived in the home just over two years.

Other items to note.  We currently have a townhouse that cash-flows $400 per month.  I am also involved in fix and flipping, which we are in the process of scaling up, looking to do multiple properties at once.  My goal is to slowly obtain buy and hold properties, while continuing the also do the fix and flips.

So the question becomes do we hold on to our current residence, market rent would be $3,000 which is unfortunately our PITI for the property. With other expenses, this would surely have negative cash-flow, but we do have the other rental that could offset that? If we keep the current property, before we put it up for rent, I would apply for a HELOC. With a 90% LTV HELOC, I would get roughly 100k, which I would invest in the fix and flip portion of my investment strategy.

The other option would be to sell my current home.  If we sold for 535k, minus selling costs, we would walk with just over 100k, which I would similarly invest in fix and flip.

I personally am leaning toward keeping it as a rental and pulling out the equity.  Then again, it will negative cash flow but does the fact that I can leverage the equity out weigh that?  I go back and forth on this everyday, any insight is helpful.

Let me know if further information is needed.  Thanks.