sell or hold? suggestions please

[Michael Pempin]

Have 70% of net worth wrapped up in equity of real estate between 3 homes.  1 primary and 2 rentals.  I planned on accumulating another property every couple of years for the next 10 years, and using rentals to help with retirement.  1 of leases is up end of May and there is quite a bit of equity tied up in the home.   Home is in Colorado, and I have been long distancing renting it for 8 years.  Have never missed a month without a tenant (had 5 tenants so far).  Perfect neighborhood/location. 

For the numbers:Owe 175k on loan, and could sell right now for 425k-450k.  Capital gains taxes will be about 40k....net cash on the sale will be around 200k after all expenses paid.  With current rents and mortgage payment, the house cash flows $600/month in cash, and equity paydown each month is $700 for a net of $1300/month in the green. 

I am debating selling the property and cannot come to a good conclusion.  I have no interest in doing a like exchange to avoid taxes and put it into another property at this current time.  I am worried about having so much net worth tied up in equity, and if things go south here, it could get ugly.  Would you consider selling, paying off debts (about 40k non mortgage debts) and holding the 160k for opportunities 10-20 months from now...or ride out the most likely upcoming storm?   If I ride it out now, I will most likely hold for next 20 + years.  If I sell now, the plan would be to use the 160k to purchase 5 or so properties and a discount once the inevitable foreclosures start rolling in. 

I know each financial plan is individual and we all have different goals.  Nobody can predict the market etc. etc....but in a vacuum, does anyone have any good thoughts or suggestions here?

[Teri Feeney Styers]

@Michael Pempin are you sure your goal is to acquire properties over the next 10 years? It seems like you are avoiding some of the obvious solutions. Can you 1031 and come up with more units that provide even more cashflow (and avoid that tax hit)? Can you refinance (which will result in higher payments) and purchase something that makes up the lost cashflow plus some? (BTW: you wouldn't be losing that 12 principal buydown - you would simply be allocating the funds differently).