Selling strategy for a Denver SF rental

[Douglas Abbott]

New to the forum here and thought I would put my situation out for critical feedback to the population. I have a question about how to handle a current rental property I own in Denver. I am trying to decide one of two things: 1.) Sell this summer and avoid capital gains as I currently qualify for the 2/5 homeowner tax exemption. 2.) Hold on for the near future and take out a HELOC to finance future deals. That is the basic scenario. Caveats: I was told by my bank last year that I could only go up to 60% LTV on a investment property, I would need 75% to make this worthwhile. Anybody else run into this? There is considerable opportunity cost with the money I would receive from the sale, mostly tax free, to move forward with. It would present me with a lot more opportunity than what I could get with a HELOC. For arguments sake I have about 55-60% LTV conservatively in equity. Just wondering if anyone else ran into this scenario? How did you move forward? Other single family rentals, MFH? or both?

Thank you, 

Doug