Refinance options Cash out or HELOC?

[Phillip Austin]

Good afternoon everyone,

I purchased a rental last year for 55k, put about 3.5k into it and brought the rent up from $750 to $800. We are currently cash flowing $425/month off of the property and the tenant is a good tenant so far. The original appraisal said that the house could be worth 75k if we were to update some things, which we did. So, the house directly across the street (which is smaller but nicer) just sold for 98k. We are weary of a potential spike in housing inventory next year and want to have cash to be ready to strike. My partner and I are both in our mid 20s so we don't have a whole lot of capital at the moment. What do you think our options are? I would like to keep the tenant and the house, it's a solid house in a good location. I am planning to read the BRRRR book, but I have to finish two other books before I can get to it.

Sorry if I rambled a bit, would looking into a cash out refinance or a HELOC be a better choice for us?

Thank you for reading and have a good day,