seeking advice - sell/refi/heloc

[Kimberly Vallance]

Hello REI's

I've got an opportunity, but my emotions are tugged. So I'm asking for some insight from those less attached.

I'm finally no longer underwater in the very first house I purchased. I bought it before I knew anything about REI, it was my first non-co-signed purchase, and it was my main residence. I've had it rented out for the last 5 years at the max the area will tolerate. It is cash flowing...$14/month. It's a classic starter home for the area, so there's nothing great or horrible about it.

I'd like to cash flow...well, enough to do something more than eat lunch once a month. The great thing is that in the last 12 months I've gone from no longer underwater to $40-50k in equity. This makes me think there is a bubble here that is going to burst soon - especially looking at some of the sales in the area. I've gotten comps from a REA, and now I need to decide what to do.

So, what would you do and why? Refi? HELOC? Sell outright and reinvest in more doors elsewhere?