Sell my house or Refi and rent out?

[Landon H.]

I bought in the Phoenix market in 2010, so I have some good equity (about 50K, based on a BPO) in my home and I want to draw it out to partner with someone to flip a property. I feel like now is the time, but I am torn between two options: Do I take the money and run by selling, or refi and hold on to this property?

My mortgage is 950/month, and can be rented in it's current state for about 1200/month. If I were to sock away 20% for expenses, that gives me a small NOI, and the equity would be sitting in the house which really doesn't get me anywhere.

The Refi would bump up my mortgage and I'd need to hold on to about 5K for an emergency fund, but if I put about 10K into remodeling, I can potentially break-even by charging more in rent. If I leave it as-is, the rent capability would be less, meaning negative cash-flow, but I'd have more left to invest.

If I sell I would have cash in-hand, but I lose any long-term opportunity in holding the property, which I believe will appreciate about 5-10% in the next two years. To be honest, I try not to depend on speculation, but I don't think we're done growing out here by a long shot and my location is pretty dang good.

One main point that I'll also make, is that my expenses are HUGE living here by myself, so moving out would significantly reduce my monthly expenses by at least 300/month, if not much more, depending on if my gf lets me move in with her ;-) I would also pay off my credit card debt which costs me $250/month.

To summarize with conservative figures:
Refi with remodel- I break even monthly, left with under 20K to invest
Refi without remodel- I have negative cash-flow monthly, but left with about 30K to invest
Sell- No cash-flow or appreciation possible, left with 35K to invest

My main questions are, do my numbers make sense, and does owning a negative cash-flowing property make sense at all?

Thanks!