Should I keep or refi?

[Jiva Segaran]

Ive been debating this as my goal is to buy a larger multifamily property but thought Id get some feedback from the BP Fam. 

I have a 3 unit multi that is cash flowing and stabilized nicely with paying sect 8 tenants. Net $1500/mo. I have $250k in equity and currently under a loan that has PMI.

I can cash out $100k refi , get rid of the pmi and a lower rate thereby keeping the monthly payment about the same (might have to pay a point due to investment property and Im  self employed.) I would not be able to go as large of a multi on the new purchase. 

OR

Sell to get the full $250k (minus closing and commissions etc costs) and do a 1031 exchange - but I lose the $18k/ year in income. 

My plan c would be to sell to an investor as a "turnkey" investment property and continue to manage it thereby retaining some of the income as a property manager.  

Thoughts?