If you're not in a position to rent, you may want to just sell for cash and get out completely.

Your sources is were you get your money from, ie debt or equity.

I hate to see them lose all of that equity, and I also have sentimental value in the home.

With a ton of equity, and by all means, we are wanting to take advantage of the 500k tax exclusion if possible.There is also a probability that we will move back into this home in the future, let's say in a few years or so.

It has roughly 50k equity in it that I want to use as a down payment/full payment on a duplex in the future.

Depending on your LTV position, you may be able to refinance now because you already have a tenant in place.

:Class A Properties:Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Vacancy Est: Historically 10%, 5% the more recent norm.Tenant Pool: Majority will have FICO scores of 680+, zero evictions in last 7 years.Class B Properties:Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.Tenant Pool: Majority will have FICO scores of 620-680, some blemishes, but should have no evictions in last 5 yearsClass C Properties:Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation.

Thinking about your refi fogs up the picture.The old properties: same tax position as before refi, absolutely no change.The new properties: your capital gain, if any, is the difference between the full sale price and the  full purchase price, regardless of financing.

I feel a lot of young investors are possibly in my position.

In my mind until they are lost they are all pre foreclosure.. when I chased these in earnest before the very strict  laws were put into place to make this activity very dicy we bought all of ours within 24 hours to 5 days of the actual sale at the steps. that's were you got the good deals.. if your mailing or contacting them with just the notice of default your going to not do very well at all.. they are not properly motivated at that point and you will waste a ton of time and money chasing those deals Along with most of these will have very little equity if any..