Cash Out Roughly $170k Equity in SFR to Purchase Multi-Family in OOS or Other?

[Dalton Thornsberry]

I purchased a SFR (condo) in 2017 for around $130,000. I currently still owe around $111,000 on this property. Rents are $1475 per month and it cash flows about $250 per month after all management expenses, HOA, maintenance, etc.

My return on equity looks pretty bad (roughly 3.7% per my calculation). Current value on the high end would put this SFR at around $280,000. Worst case I sell for closer to $250,000. There are plenty of opportunities out there it looks like to deploy the roughly $120,000 capital (worst case) that I would see from selling in an OOS market. At the very least I could roll this into a duplex or triplex in the same market (Bakersfield, CA) and probably cash flow quite a bit more than I currently am. However, appreciation would likely not be as high on said duplex or triplex.

This feels like a no-brainer even with sky high rates. It feels like I should take that equity and put it into a Multi-Family property as I am only 30 years old and have plenty of time to continue to acquire and build my portfolio. At the very least that capital would allow me to control $400,000+ in Real Estate value v. the current $280,000 or so. If I took said cash from the sell and put it into a $200,000 property out of state I feel I could even cash flow WAY more than the current $250 monthly. 

What are the drawbacks? What am I missing? Need some help navigating this idea. Cash out re-fi would eat all cash flow and I'm not sure it would give me enough capital to tackle a quality property with current rates (I'm locked in at 4.25%).  

Thanks!

Dalton