Refinance for Cash Out or Sell to profit and Rent? Need Strategy

[William M.]

Currently I live in a Townhome in Los Angeles county. 4 years into property. Refinanced first year to 3.5% VA Loan. I have about $100,000 in equity.

Should I refinance to get $40,000. Same interest rate with VA. Will add about $150.00 a month more in mortgage. Pay off debt.
or
Risk to Sell and Rent, pocket $100,000. Rent for a couple of years, wait for the market to cool back down, especially in Los Angeles, houses are expensive at the moment.

I've been taking some economic class, so by no means I'm an expert, but looking at how the market has recently stalled a bit due to limited supply and interest rates raising. I know the market tends to cool down in cycles and we are due soon.

I have talked to several agents and they notice a bit of stalling as of late due to Fed Rate raise recently, a bit unusual for summer.

Have about $25,000 in debt. Will pay off all. Free up debt to income ratio. Save some for rainy day. What is the best strategy? Maybe there is another opportunity I have not explored?  All advice is appreciated.