Should I sell or should I hold?

[Paul Ricci Jr]

Hey everyone, I had a question about when / is there a good time to cash out on a rental property to then leverage that into a better situation or multiple new builds. 

I purchased and lived in my first duplex about 5 years ago. I paid $166,000 for it and collected rent while I lived for in the other side. The market is hot right now (North East FL, just north of Daytona Beach) and me and my family just build a new home. I'm confident I could get $350,000 (for the sake of discussion lets roll with that). The units are in great shape, newer AC units (3 and 4 yrs old) and a new roof (1 year old) built in 2004.

The house is now paid off and renting for $1,400 (each side) which is great. Lots of people are moving into this area and there is a new house being built on every street, new apartments and many old folks homes.

My question is, wouldn't it make sense to sell now, make $184,000 profit free from capital gains and reinvest in something bigger? I would be able to build 2 new duplexes with that $184,000 in this area plus have my initial $166,000.

Any thoughts would be appreciated! I'm 27 and enjoy real-estate so I'm looking for ways to move up and leverage my equity to acquire another multifamily. I own a duplex zoned lot as well so the new build would be ready to go (275K for a 3/2 duplex in this area) + land. 

Or would a HELOC make more sense to fund a new build?

I appreciate your thoughts in advance!

[Nat C.]

I will give you some advice which I wish someone had drilled into me years ago. NEVER SELL. Well, only sell if the asset is creating problems that you can't resolve. Otherwise your goal should be to hold as much RE as possible and keep buying. 

So indeed, a HELOC is the way to go. Just keep buying, renovating and refinancing, as per the BRRRR model. By the time you are 40, you would have amassed great wealth.

By the way, which area North of Daytona are you referring to? Ormond Beach?