Looking for input on previous primary residence.

[Clayton Smalley]

I bought a 3 bedroom 2 bathroom house in Wilmington, NC in 2009 for $205,000. I had to move to Utah for work in 2014, at the time I would have had a hard time selling it and would have been upside down if I had. I found a property manager and have rented it ever since with no problem keeping a tenant in it so far (knock on wood). The problem is I pay about $40 a month towards my original mortgage on the house. Fast forward to now, I owe $179,000, the comps in the area for similar properties are $230,000-$240,000. My current mortgage is the primary at 5%. I am new to this and am looking for the best path to take. If this was your property would you refinance to try and get the property to cash flow or refi and pull the equity and buy more properties or sell? Thanks for your help. P.S. If you are an investor in NC and know a good lender I could talk to about a redo on an investment property I would appreciate that info too. Thanks!

[Amy Kendall]

@Clayton Smalley  You will only be able to pull out up to 80% of the property value on a refinance, which for you would look like ($240,000 x .8 = $192,000 - $179,000 = $13,000).  Refinancing your loan to $192,000 probably wouldn't significantly help your cash flow situation, and the $13,000 would only get you into a cheaper rental somewhere out of state (in a possible war zone unless you have additional capital to also invest).  

If you sale at $240,000, however, you would probably have around $45,000 after selling fees to invest elsewhere.  I would recommend doing a 1031 exchange on this money into another property or possibly two.  Are you interested in investing locally, or out of state?  If you are looking out of state, you could probably acquire two properties that combined could cash flow much better ($700-900/month).  Locally, you could invest in a MF property and possibly see around this much in cash flow as well.  Invested locally in a single family home in Utah, you could probably expect a $300-450/month cash flow.

I hope this helps!  It appears you would be better off considering selling.  If I can be of any further help to you, just let me know!