Upgrade location even with less cashflow?

[Karolina Powell]

I own 7 properties (8 doors) in southwest Pennsylvania free and clear.  I cash flow about 7k a month after expenses.  These are in C locations but my places are on the nicer end of what is available in those locations and my rent is also on the high end.  Haven't had any problems with tenants yet.  I have about 800K of untapped equity.  These places will not have a lot of appreciation.  

I am considering cashing out 3-4 of these properties and using those funds as the down payment on homes in better location - B/A-.  This will better diversify my portfolio and let me add some places that should appreciate nicely.  If I cash out three of them, I can get six other places.  Unfortunately, this will actually bring my cash flow DOWN due to the interest rates.  Take equity out of one property will cost me about 1K a month and with the mortgages on the new purchases, I will probably only cash flow 200-300 per home.  So if I refi three and buy six more - than I lose about 3K in cash flow and only add 2400 in cash flow from the newer places.  This will get better once interest rates come down and I can refi.  

What would you do?