Converting Primary Residence to Rental Property and Cash Out Refi
I recently converted my primary residence into a rental property and have a tenant for 1 year. Market rent is $2800, mortgage, taxes, and insurance is $1500. If I max my LTV to 75% with a cash out refi, I will break even on rent or possibly be negative in cash flow. The property is in a Dallas neighborhood that is experiencing large growth and gentrification and within walking distance of popular restaurants and entertainment. Equity growth has been solid and shows no sign of stopping. I plan to invest the cash in fix and flips and I already have an experienced partner in place to work with.
Should I leave more equity in the property to make sure the rent covers this additional debt? How much cash reserve should I set aside for vacancy?