Will my current home cashflow well?

[Chris Noles]

Hi! My wife and I are new to real estate investing. Since we are planning to purchase and move into a new home for our primary residence, we are trying to figure out if our current home will cashflow well. Our situation is complicated, so I am having a really hard time getting any calculators to give us a good assessment. Here is what we have going on - Our current home is a 1969 brick ranch home. 3BR/3 Bath. 2 small finished rooms in the basement (no bed or bath in the basement). We took out a $50K personal loan (not a HELOC) to remodel both bathrooms, replace kitchen tile floors, install new breaker box/electrical, install a new french drain, and replace some older copper pipes with PEX. We have a balance of $47,000 on this loan with a remaining term of 76 months at an interest rate of 12.87%. The home could sell for between $195K and $205K, and homes like this are selling fast in this area. We have 23 months remaining on our home mortgage, and our balance is $146,000 at an interest rate of 4.25%. Our property taxes are $2,208.00 annually, and our monthly mortgage payment with taxes and insurance is $1,221.62 monthly.

The mortgage broker that I am working with says we could keep and refi this house on a 30 year term at 3.75% when we close on a new house.  This would bring the mortgage payment down to about $1050.00 per month including taxes & insurance.  

We see other homes like ours rent for around $1,500 to $1,700 per month without finishing the basement to add more rooms.  The good news is that we have covered most of the major capex replacement in the last five years (HVAC, plumbing, electrical, etc.) 

We are trying to decide what might be the best thing to do considering the pandemic:

A.) Sell the home and get the $40K to $55K cash equity and invest somewhere else before home values drop again.

B.) Sell the home, get the equity and househack a new home.

C.) Buy a new home and rent the old home while getting some cashflow and slowly build capital gains.

D.) Buy a new home and seek out a multi-plex home or REIT investment.

Unfortunately, this particular area in Atlanta has been slow to recover since 2008, and home values have not appreciated like other areas of Atlanta. 

I know that we could finish the basement for another $45K, and that would add 3 more bedrooms and 2 bathrooms that could cashflow at around $1200/mo but we are concerned about dumping more money into this home while still trying to payoff the personal loan for other home improvements.

On a personal note, my mother in law is currently living here with us, and if we keep the home she can pay us rent and bring in other "golden girl" tenants.  On the other hand, we could just get a new home with an in law suite.

I am really struggling to figure out if keeping this home makes sense at all.

Thanks for any suggestions!