To Pay-off, Sell or ReFi?

I am a buy and hold, SFH rental investor.  I've been in the business off and on since 2002, but have really been into it full swing since 2011.  I had the "worst nightmare" situation with my first rental, with a terrible tenant, bad property manager, damage and a nasty eviction.  Oh, and I did not have enough reserves to get me through this tough time so I had to sell.  I was also short on education in financial management and wealth building, but I've been working on that ever since.  (Thank-you Robert Kiyosaki and others!) 

Now don't get me wrong, not including cash flow I almost doubled my money over 5 years so you could consider it a slow-motion flip.  But the really bad part is the experience soured me on the whole REI idea.  I had been interested in REI for years, but this experience saw me taking about 5-7 years off before I came back to the REI camp.  I missed some wonderful times for investing and lost all of that appreciation and compounding.  I would have achieved my goals by now and be looking for the next challenge rather than trying to get there still.

So that's my background, and now I have a handful of rentals, the oldest of which I've had for five years now.  I bought it below market, fixed it up, and it has been flowing pretty well except for a few expenses.  (Older house, more CapEx)  Now I have equity and appreciation and owe about 1/3 of what it's worth today.  So the big question is what to do now?  Should I sell to harvest the appreciation, refinance to harvest my equity, take out a line of credit, pay it off, or what?

I have been struggling with this decision for some time now.  Many authors will cry out in favor of one or the other strategy, but it really does come down to what is best for your situation.  In my market, there is very little inventory available.  Houses are selling above list within weeks of being listed.  It's not a good time to be looking for investment property.  Now don't get me wrong, there are always some deals out there, but they are very hard to find right now.  But that also makes it a great time to sell for a profit.  What to do?

I have decided the best option  for me is to cash out ReFi (with interest rates so low) and pull out my original investment.  When the dust settles, I'll have the same house, it will still cash flow about $250 /month, and I will have 25% equity.  But I will also walk away with all my original investment, and then some, in cash, tax free.  Of course, it's time to find another deal with that money!

Now I consider myself in the ramping-up phase of my portfolio building.  I have 4 rentals today, with a near-term goal of 10, before I start paying them off for retirement years.  I would like to have 7-10 properties cash flowing an average of $1000 per month at the end of this road, a very realistic goal in my market.  So that's my story and my plan.  How about you?  Has anyone else out there been struggling with this type of decision?  Share with us in the comments!