Strategy question - House flipping / long term hold / cash out refinance

[Henry Hsieh]

I own two fully paid out single family homes through a 1031 exchange, my original thought process is to keep them long term since that's been what I've done in the past, however I am contemplating changing my strategy since I'm seeing a lot of movement in the local real estate market that people are flipping them within a month of their purchase on the home.  I'm trying to work out the pros and cons, some help from those experienced is greatly appreciated.

1.  Keeping it long term - Let the home appreciate over time and 1031 exchange it upward in due time while leasing it

2.  Flipping them - I haven't meet my obligation from the 1031 exchange to keep them for 2 years.  From what I'm seeing folks doing in my neighborhood is marking it up by another $100k and selling them within a month or two after requiring them.  From paper this looks good, but even with that, wouldn't the tax kill all of this effort if I also gone this direction?  However, this would then allow me to have more cash to work on and to buy more properties without fully paying them off to maybe 3 or 4 from 2?

3.  Keep the two properties and do a cash out refinance - Extract cash from the two properties and while keeping the two for long term leases, use the cash to buy another property and hope the interest rates drop this year which is likely from what Powell is saying.  In this strategy, maximize the units but all of the properties are now financed.

For the veterans in this space out there, how would you look at these three options or option 4 if I may have missed one to maximize your returns over time?  Thanks.