What would you do with 50k from a rental property sale?

[Kori Kelly]

I’m selling my renta l and i should receive about 55k profit. I wanted to pay off one of my rentals that I only owe 30k on to increase cash flow. Then pay off some debt to make me more bankable for a heloc. Is that a good strategy or should I use the money to buy another rental? Or something else all together? 

[Kevin Sobilo]

@Kori Kelly, paying off debt to borrow it back at today's higher interest rates through a heloc doesn't make sense to me.

I would do a 1031 exchange and buy another rental. The 1031 exchange is key because it keeps you from having to pay taxes on the profits from your sale until later on down the road or possibly never. The less you pay the tax man the more you have to invest and make grow.