Hold or 1031 exchange current rental property

[Pete Jimenez]

Hello BP, I am a new investor and would like some advise on what to do with my current rental property.  The options I'm considering are the following....

Property appraised Value $480,000 ("A" neighborhood)

Owe: $313,000 

two HOA's: $240 per month total.

Option 1: 

Currently on a FHA loan and will be doing a cash out refinance ($30,000) and converting into a conventional loan. With a cash out refi and will still be saving about $25 per month vs what my current loan is sitting at. I'm cash flowing a bit on the property and there is opportunity to raise rent $200 when my current renters leave. Current renters are excellent and have never paid late and the area is a great area to live in.

I have about $50,000 saved and can take the $30,000 (cash out) and use all the money ($80,000) for a down payment on my next investment property. I hate the HOA's as they have gone up over the past couple of years by $100.

Option 2: 

Sell my current property for appraised value and after fees can 1031 exchange the equity of about $137,000 into another property. I could even add my $50,000 savings and possibly purchase two properties. This would most likely be B or C neighborhoods. 

Cash flow is important but isn't the end all be all for me at this time since my fiance and I both have great jobs. My goal is to buy and hold for the long term and have the cash flow working for us in the next 15 or 20 years. as we get close to retirement.

Thank you for reading and appreciate the feedback.