Long Term Rental - Would you keep it?

[Colin Smith]

I am trying to decide whether or not I should keep a single family home or sell it and am looking for advice. Here is the background story.

I bought this house as my first home borrowing the down payment from my parents at 3% and I only paid the closing costs. It was both a live-in-flip and house hacking home. Since then I have bought a new house, another live-in-flip, with my new wife, but we will not be house hacking this one. In order to do this, we used a line of credit on my old house to buy the new one with the intention to sell the old one, however, I am now reconsidering, even though it wouldn't meet the 1% rule and won't cash flow. Here are the current numbers:

Original Purchase Price: $156,000

Current Value: $225,000

1st Mortgage Lien: $116,000

Line of Credit Lien: $60,000

Parents Lien: $15,000

Rent: $1,400 / Month

If I sell it, I could pay off all the liens and my student loan ($15,000) and we would be debt free less our current primary mortgage... something to consider as I would like to be purchasing another flip in the next few months which may help boost my credit ability. Or I Refinance the current 1st and line of credit:

New 1st Mortgage: $168,750 - 4.5%, 30 Yr Fixed, 0 Points, $855 / Month - I'll pay the $7,250 to pay the difference between the new loan amount and the original 1st and line of credit. 

Parents Lien: $15,000 - $625 / Month - 3% - Paid in Full 11/2017

Therefore: 

Rent: $1,400 / Month

Mortgages: $1480 / Month for 2 years, then $855 / Month

HOA - $50 / Month (Includes Trash)

Taxes & Insurance: $140 / Month

So, do I sell it and become debt free less my mortgage and buy BRRRR properties in the future, or do I keep it as a long term wealth building investment that won't cash flow?

[Joe Villeneuve]

What kind of wealth will you have if you have negative cash flow.  That's like playing poker with a bad hand...and you still keep adding to the pot.

Sell it, and get another property to replace it that WILL have positive cash flow.

As far as future wealth, the new property will replace this one's potential, but it won't steal parts of it from you due to the NC F.