First BRRRR Property: Refinance or Sell??

[Nelson Reis]

Hi fellow investors, I'm looking for some advice here. I purchased my first investment multifamily property in 2016, with the intention of using the BRRRR method to continue growing a portfolio. Shortly after buying the house, I was laid off of work however managed to stay afloat (sort of). I racked up a lot of credit card debt during this time, which now totals to ~20k. I'm in a better situation now with a better job and looking to continue on my path, however before looking for my next home I'd like to get rid of this debt. I'm trying to weigh my options and considered doing a cash out refi.

My current loan balance is 128k and after checking comps in my area I strongly believe the property is worth ~200k. I considered cashing out some equity to pay off this debt but after running some numbers it seems like the net amount almost wouldn’t be worth refinancing and possibly getting a higher interest rate (currently 3.75) and raising my mortgage for. I originally planned on using this equity towards my next property and likely won’t have any money left over to do so. The next option I was considering is selling.

It seems to me if I sell the property I’ll be able to pay off all debts and still have cash left over for a down payment on my next property, sort of starting from a clean slate. It isn’t an ideal option as Id like to keep my portfolio growing and not start over.

My question is do either of these two options make sense, or is there something I’m not thinking of? I’m open to all ideas and appreciate any feedback.