To Sell or Not to Sell. That is the question.

[Clinton Davis]

I'm trying to determine if it would be better to sell and collect this equity on one of my properties or keep it and continue reaping the nice cash flow it produces.  Here's the situation.

Home has a mortgage of 27 years remaining with a 6.25% rate.  

principle balance of $84,000

est. value = $190,000.

monthly PITI= $702

monthly rent= $1,300

Option a: keep the property and enjoy the nice cash flow.  

Option b: Sell the property and 1031 the balance to put down on 2 other properties.  Only thing is with the rates and property values like they are now my new properties will by hard pressed to make $200-300 per property to cash flow.  But I wanted to move into slightly better class of property so I could benefit from appreciation more.  

I am cash poor right now.  So selling sounds good in order to tap into the equity.  However, with renting, I'm making nearly $700 after piti and that's pretty hefty around here.  

Is it better to keep one property that's producing well or sell one to get two and have similar results as far as income minus expenses?  I think selling and buying 2 more will be good for potential benefits of appreciation.  But the cash flow performance will be about the same.  

I know what you're thinking. Keep it and just cash out refi. Well, that's also a possibility but I think my lender will only do 75% LTV which puts my new payment at around $1170 PITI with a $142,000 principle balance. That leaves me with $58,000. Of course there are a number of fees for the loan so let's estimate cash out of $52,000.

With this $50k I could finance one additional property.  I would decrease my cash flow (not accounting for maintenance yet) on the property A.  But still hopefully net ~$200/month.  While adding a new property.  

What would you do?  Thank you.