Sell my investment property Or Refinance/HELOC?

[Ofer Attia]

Hey guys.

I own several rental properties in three different states. And Im considering to sell one of my properties in Phoenix, AZ. I have been renting it out for six years now, and the current rent is $1500/month. The house is fully paid for, and don't have a mortgage. I bought it for $110K initially, and I could probably sell it for $220K.

I'm now thinking of keeping it as a long term rental instead, To Avoid Paying Capital Gains.

If I do keep it, I've thought about doing a cash-out refinance to get some of the equity (can get about $150/160K) and to buy two more rental properties in NC and rent them out for $1000/month each property.

So, better to sell now and pay taxes ? or do refinance/HELOC?

Also, which bank you recommend to do refinance for an investment property?

In my case, refinance will be better than HELOC?

Any thoughts would be appreciated.

[Yonah Weiss]

@Ofer Attia congrats on your success with the rentals, sounds like you have great cash-flow without debt service, and it has appreciated very well. Whether you refinance or use a HELOC, you will be taking on debt, so just make sure the cash flow from the rentals will be greater than the current cash-flow without debt.

Alternatively you can do a 1031 exchange, to sell the property without incurring any capital gains tax. This gives you much greater buying power, and increased potential cash-flow.