Cash-out refinance for next rental
Hi all,
Purchased my first duplex just over 10 months ago. Put some work into it with it rented the whole time and thinking about doing a cash-out refinance for my next investment property. In contract on a property for myself at the moment so do not have enough cash for another rental. I got in at a lower rate on the duplex 10 months ago and if I refinance, I’ll lock in almost 100bps higher rate (I believe). The refinance would increase the mortgage every month, but I have room to work with on the property so it would still be running cash flow positive. My question is, do you guys cash out and put into the next property ASAP as long as he property is still enough in the green for you? If the mortgage on the first property goes up at a higher amount than you are cash flowing on your next rental (with the cash out money), is it still worth moving forward? Or is that where you draw the line? Maybe you don’t care too much because it’s another property for potential appreciation under your belt that the tenants are paying off? Please let me know your thoughts! Much appreciated.
-Steve