Advice needed for a SFH situation

[Brad Jones]

A coworker and I purchased a SFH out of state while working in the area. Due to downturns in the industry we are no longer working in that area and currently have it rented out. I am looking for advice on this situation as I can buy him out. I'm not well versed in real estate investing, yet.

I see a few possible options that seem like they could be viable and thought I'd pick some brains to see if I'm on the right track at all.

1. Buy him out with cash and continue on as is, with a slight increase in monthly income from his portion of the rent now going to me. Downside is the payment to buy him out.

2. Buy him out and refi the remaining balance to lower monthly payments. This would increase the monthly income a little more, but I would then also have the added costs of the refi on top of buying him out.

3. Buy him out, refi for a lower interest rate and for the max value I could get to use for another investment property. The upside to this would be freeing up some funds to pursue another deal.

I would greatly appreciate your feedback or other options you may have in mind.

Below are some numbers, if more information is needed please let me know.

Purchase Price - $168,800

Mortgage Balance - $125,000

Est. Value - $180,000

Current Intrest Rate - 4.5%

New Interest Rate - Unknown

Current Rent $1500/mo - 10% for property mgmt.

Buy Out - $20k-$25k

Thank you so for your consideration.