Your ROE  (return on equity) as you have found is not good .  

I also feel the checkbook Ira  based on the "Swanson vs IRS" case will be overturned one day and that will be require a revamping of LLCs with the owner as the manager.

It's interesting to see a Midwest investor on BP writing about appreciation and low ROE. 

Here are a few topics I was thinking about including in the class:- The Real Estate Investment lingo (NOI, Cap rate, CFO, IRR, ROI, ROA, ROE, CoC, etc)- examples of how to analyze real estate deals (BOE analysis)- the triad of real estate returns (debt pay down, cash flow and appreciation)- the real estate market ecosystem (investors, capital markets, asset market, space market, local/national economy/development industry)- Use of leverage - both sides of the sword.- effect of market cycles in real estate returns- syndication of real estate deals (the myth of always having to foot the equity bill)these are just a few topics that I thought should be mentioned.

We still own the lake front but will likely sell when current tenant decides to move.Horror stories include the usual out of state issues of finding good reliable contractors (after getting hit by two hurricanes - We needed to go out there both times to manage the repairs), no rent appreciation, property tax increases (appraised value went up but we were unable to sell at close to the value the state appraised at), short-term help turn-over, turn-over of management company, etc.  

We manage over 500 doors mostly sfr and condos and recently started going after multi-family..picked up our first 20 door property this week and have a meeting on a 26 door next week...we use direct mail to owners and network with our current owners and Realtors....we also use online lead generation and Yelp...we also conduct Local Landlord Seminars and target SMIPOs (Self-Managing Investment Property Owners) need the multi-family doors so we can upsell owners with low ROEs...

Even if you choose this strategy based on the ROE, you should consider doing a cash out refi (again, as others have already mentioned).

Absolutely you should calculate it and understand the impact to your cash flow.Here is another calculation I would encourage you to do:Take your current cash flow and divide by your equity in the house to derive your return on equity (ROE)Compare that to your future cash flow and future equity to figure out your ROE after refinancingIn most cases you will find that your ROE goes UP through a cash-out refi. 

If you ever did get in hot water with your property and incurred a big liability, a judge could overturn your LLC protection anyway if it appears that the only reason you hold it in an LLC is for the legal protection.

When you're looking at tapping into the equity I like to look at the Return on Equity (ROE) calculation.