Should I sell my Primary Residence?

[Bryan Wilson]

Hello everyone, 

I have a primary residence that I owe $143K on with 30 year fixed @ 4.25%.  I have about 23 more years on the loan.  My payment is $1100/month and rents in the area are $1700-1900 typically in my neighborhood.  I think I can get $1700 as my residence is on the smaller side.  

I have a plot of land family owned that i have the right to purchase at $90K the land is worth $100K+ as it is on a lake and major outdoor trail system.  I want to build on this for my next primary home residence, but currently do not qualify for a loan based on my income level.  We are looking at an all in cost of $300k for the land and build of our next house.  

Current comps and going market rate for my house puts me in a $200-220k range for sale.  I know we can get $200k, but without doing some fix-up would have a harder time appraising near the $220k range.  If I put in a lot of additional capital I could fix the house up enough to possibly sell near $240k as full remodeled homes in the neighborhood are selling at that price.  

My questions is whether I should keep my primary as a rental, sell for the equity, or cash-out refinance?  I'm a new investor and have my opinions to what I'd like to do, but would love the communities insight.  We qualify to purchase the land right now as is and have no timeline to purchase as our right to first refusal is upon my Grandmas death which till then she pays the taxes and holds onto the property.  In order to build the next house though I'm pretty certain that a sale is necessary.