Help doing this math please

[Alicia C.]

Hello! I need some help sorting this out in my head. We have a LTR that was our primary home. Purchased in 2007. Bought for $220,000. Currently owe $100,000. Rents for $2100/month. Mortgage is a 15 or 20 year (I can't remember) so it's higher than usual. Therefore the rent barely covers the PITI by $200/month. Current market value for the house is about $265,000.

Option 1:  sell soon, make about $150,000 after it's all said and done.  Take that cash and use it as down payments on less expensive houses that, when totaled up, equal more than $2100 cash flow.  

Option 2:  keep it, dump money into it until it's paid off.  Have a $265,000ish paid for house that cash flows $2100/month.  

Option 3:  do option 2 but then take out a line of credit on the equity and buy more houses.

Option 4:  something I haven't listed here.

Thanks my friends!

[Chris Davidson]

@Alicia C. What are your longer-term goals? Are you wanting to build cashflow with leverage or are you looking to slow down and deleverage while increasing cash flow? Like @Michael Plante suggested a refi might give you the cash flow you are needing, and if you don't take cash out, you are looking at a payment on 100K at today's rates that isn't much. However, if you are looking to scale and set yourself up for larger gains down the road and want to put the work then I would sell and get you more properties cash flowing to your standards. 

Hope that helps!