Additionally, we have equity of approximately $145,000.Now, we are faced with a dilemma: should we sell our current property and purchase in a more favorable neighborhood, or should we rent the house and let it pay for itself.We would greatly appreciate any advice you may have.

Additionally, the price point is still cheap enough to find the 1% rule and positive cash flow and there's amazing appreciation potential.

With the economy of scale in multifamily, each additional unit nets you a little more than the last, as a rule of thumb.

These are professionals with additional training and a stricter code of ethics.

The 2-3% points in extra cost are worth it if you plan on using as I described above because the use would be for a few  months at most and due to that short term use you can survive a rate adjustment up.But, if you have no plan to payoff the debt like when using for a down payment on a long term hold why pay the extra cost for flexibility and have the additional risk of the adjustable rate with the amortization looming when you can get a fixed rate second mortgage. 

I was fine with all these numbers.Then I met with contractors...First, I wanted to add a new bathroom and approximately 450 sq ft of additional living space.

There are also additional costs of operating and maintaining an LLC, like separate bank accounts, annual report filings, tax filings, etc.2.

At the end of the day; you need more money to do something like this.MAX LTV on new builds is 80% LTC, Meaning if the build is $550,000 and Land is XAdd ($550,000 + x ) * .8 = LOAN AMOUNTYou would need to come in with MINIMUM 20% of the cost in addition to closing costs and reserves, $80,000 is not going to cut it for this project.

Feedback has not suggested property needs additional repairs/work, only that they are looking in a different area.

In addition, the debt of each state is crippling.