Sell a rental property, renovate or reinvest

[Randall Link]

I have a single family house (rental property) that will be paid off next year. It is in need of renovations due to neglect on my part. I have a few options I'm considering. Sell the house as is and roll the proceeds into two town homes to be used as rentals. Obtain a HELOC to make improvements to the house, sell it or put it back on the rental market, or maybe use a HELOC to perform the renovations and to make down payments on two rental town homes. What should I consider?