1031 Exchange or Refin with Cash out

[Don Ha]

I'm a newbie here... I am seeking some advice from the PROs.

I have a triplex with market value about $800K, no loan, free and clear with solid annual cash flow of about $35K. I'm currently thinking to expand my rental portfolio to a apartment complex or a few MFR's with either cash or finance.

My dilemma: If I choose exchange, i'll loose my current cash flow but save money on otherwise cash out interest; or if I refin I'll continue my current cash flow but pay interest on the loan.  The refin loan payment almost cancel out the cash flow...

My question is: Should I do 1031 exchange or refin 75% ($600K) at 6.50% 7-yr ARM/30 cash out?

Thanks in advance for your advice... I also welcome other options.

[Alina Trigub]

@Don Ha

Have you thought about taking a HELOC on your property?

If it cash flows and you're happy with the cash flow, then keep it. Also you have to decide for yourself what your long term RE plans are. Do you want to accumulate a few properties and run with it, it's one thing and go for HELOC. If however, you want to grow exponentially, then I'd consider 1031 into larger deal.

Best!