Should I refinance for more deals? BRRRR Novice question

[Doug Spence]

Hi all! I'm considering refinancing my first investment property to buy more deals. Here are the details:

Purchase price of the home two years ago: 198k

Currently Owe: 151k

Zestimate (I realize this is not an appraisal): 272k

Currently renting for $1950/month, mortgage is $1045/month. 

My long term goals are to buy one property/year to grow my portfolio. I'll be closing on my second property (out of state thanks to @David Greene's book and @stuart grazier) within one month.

I don't have any experience with the BRRRR strategy, just heard about it a lot on the podcasts. What other questions should I be addressing? Any feedback is welcome! I couldn't find a BRRRR specific section of the forum to post this in, so mods feel free to relocate if necessary.

[Jack Inman]

@Doug Spence  If, hypothetically, the home appraised for around 260k then you could pull out 195k in cash assuming your lender allows you to pull out 75%. That'd leave you with around 40k in cash after you paid off your existing loan.

I'm assuming your current loan is amortized over 20 years. If your cash-out loan was also at 20 years, and you paid around 5% interest then your monthly payment would be about $1,287. So, you'll have to pay an additional $242/ month or 2,904/ year to cover the added debt service. If you can reinvest the 40k into an investment that will spin off income in excess of 2,904/ year (around 7.5% ROI) then it makes sense to refinance. Otherwise you may want to look into extending the amortization period or just leaving the capital in the property.

I'm making a lot of assumptions, but the point is that you need to figure out exactly what this would do to your cash flow and decide if it makes financial sense to complete a refinance.