Even if you were to pull out the 33K in cash (after commission and fees, assuming you only had about 44K in equity), there is nothing to buy which would give you better cashflow at your price point.   

I also had an extra $100k in equity above and beyond what I put in as a down payment on the day I closed escrow.

At the time the balloon is due, I will have $104,000 in equity assuming 0% appreciation.

not sure where i start with that.Thanks Cash on Cash return is the ratio of your cash income {Cash Flow Before Taxes (CFBT)} to the cash invested (your total capital injected prior to property being put into service).As an example if the property were valued at 150K when it became a rental and, between your initial downpayment, subsequent principal payments, and capital improvements before it became a rental, you had 50K in equity (100K in debt), then your cash invested is 50K.Say the townhouse rents for $1000/month with operating expenses and debt service of $700/month; your cash income (CFBT) is $300/month ($3600/year).  

I put in about 130K in equity into this building so I am currently upside down.

While you will only cashflow $100-200/mo on your condo, you would be building another $6k/year (or whatever) in equity in the home.

Hello,I'm relocating to Sioux Falls, SD for at least a couple of years and am looking to buy a fixer (I like to build in equity and my wife is an Architect and Project Manager) to be our primary residence, then rent it out if/when we move away.I'm an experienced real estate investor (buy + hold for rent) but don't have a team anywhere near South Dakota.Would appreciate referrals for:Real Estate Agent (ideally experienced in income properties but I've checked out the purchase and rental markets in Sioux Falls remotely and really just need someone for showings and the transaction)Inspector (someone extremely thorough - I need to know exactly what I'm getting into so I can plan and budget properly)Contractor (looking for licensed, bonded, experienced, inexpensive but reliable - I'm willing to pay more for durable and low-maintenance rehabs and renovations)Property Manager (I will no longer be living in the area when the property becomes a rental)Handyman (if I don't find a Property Manager I like, I'll manage remotely but will need someone who can respond to urgent and/or low $ maintenance issues - I'll remotely hire trades to deal with bigger issues.  

I figure I have somewhere in the neighborhood of 1-1.2M in equity overall (300k equity in my primary and the rest in my rentals).

In my SFR portfolio I have approximately $300k in equity with $200k in a single property. 

I would not offer him the whole 130K unless you are planning a buy and hold the property, but at best, depending on the property and its age and any problems, I would only offer him 100K, therefore leaving you with 30K in equity.