Refinance vs Selling

[Adam Petterson]

Bigger Pockets Community,

I am new to bigger pockets and wanted to ask for some help with a decision that I have been battling over the past few months. To give you a little background on myself, I have worked in commercial real estate as both an analyst and a lender for deals ranging from a single family investment properties to a 20+ unit apartment complex. However, being in my early twenties, I am new to personally investing in real estate and just recently obtained my real estate license. I currently own one single family property that I purchased in July of 2016 for $220,000. With the property values steadily increasing and after putting in about $20,000 in rehab to the property, market value for the property is around $275,000. I am trying to decide whether to refinance the property and get cash out, or to sell the property and move on to my next property.

Details on Property:

- 4 bedroom + large den (not legally qualified as bedroom but by far biggest room in house), 2 bathrooms, and 2,100 square feet

Loan Details:

- Currently on a 20 year Fixed at 3.375%, Loan balance is approximately $171,000

Refinancing:

I am thinking about refinancing the property in order to cash out almost $50,000 and stretch my loan amortization to 30 years. With todays current rates, I would be able to get the cash and stretch the amortization while still keep my monthly payment almost the exact same. Cash flow on the house would be good for rental purposes. I live in St. Paul within 1 mile of 5 college campuses and would be able to rent the property for around $2,200 per month with a mortgage payment of $1,300

Selling:

I frequently am looking at listings and open houses in my neighborhood and see the homes around me selling at inflated prices. Multiple properties have sold for $250k-$275k that are in need of some TLC in the immediate area. If I sold at $275,000 I would be able to clear approximately $90,000 (that is counting the money I have already sunk in to the property). With that cash I would be able to purchase another property in the area in order to try to renovate and add value.

Any thoughts? I appreciate all the help and advice you can offer.

Thanks,

Adam