The bank will make you leave 25% equity in the property - but you also still want the property to at least cash flow some - so be careful how much equity you pull out / new debt you take on.I would do a cost benefit analysis of what your actual gain is in cash-flow on buying a new property with a (currently) higher interest rate (if financing), versus just holding on to the current appreciated property and enjoying that cash flow.All the best!

Maybe you can find other hosts to split the cost.

Cost approach A straightforward method that adds the cost of the land to the cost of building construction.

He owns an asset that is worth (low-end) $300k that generates 2300/month (after all costs).

Can try to reposition to Class B, but neighborhood may impede these efforts.Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years.

We are in a constricted market cycle, low volume, strained budgets, high costs.

Borrowing $200K at 4-5% will cost you $8000 - $10,000 of interest each year. 

@Loren Souers I'd have to run the specific scenarios with the rates and fees, but if you're OK with paying the higher closing costs, the Mortgage 1 deal looks good, particularly if you focus on CoC returns.

@Sam HendricksenMultifamily is super competitive in this area and you have a huge advantage over your "competition" with the fact that you are owner occupying as most deals nowadays hardly cash flow. 

Invest in Fix-and-Flip Properties:Use the $50K as a down payment or cover acquisition costs for a non-recourse loan (required for SDIRAs).