How to make my next investment

[Lewis A.]

Hey everyone, I would like some advise on how to make my next investment and in what direction I should go please.

Our primary residence has doubled in value from our low purchase price and renovations. Our lender tells us we could pull out 200k of equity. This property is mortgaged and with the refinance we would still be able to meet our mortgage although it would affect our ability to save until the new investment makes cash flow. It would also mean that what we purchase would be free and clear.

Our rental apartment is paid for and provides $900.00 per month net cash flow after HOA and insurance.

I feel our next investment will define our ability or our inability to further invest in the future.

If I refinance the 200k will cost me around $900.00 extra per month. So as I see it my investment should pay for the $900.00 and the new investments fees and provide a return worthy of the risk.

Option1. I can likely purchase 3 depressed apartments and fix them out of pocket over time to scale from $800.00 pm per unit to $1200.00 per month per unit.

$800x3=$2400-HOA$1350-mortgage$900=$150

$1200x3=$3600-HOA$1350-mortgage$900=$1350

I have difficulty seeing the benefit against the risk to my primary residence and to be honest scaling up would be difficult as I would loose money if units were not rented.

Option 2 is a duplex property which would only scale slightly over time with upgrades.

$2000-insurance/yard$525-mortgage$900=$575


Option 3 would be to find a 3 unit building that could make between $1875 per month after all expenses and mortgage and scale to $3075.00 with upgrades.

Of course option 3 is sounding better but finding a 3 unit building at my price is not going to be easy.

The 1% rule is becoming clouded when factoring in the cost of the home refinance.
Please provide feedback on my way of thinking. And suggest if you think a home refinance is a smart move at this stage.

Thank you.