Multi-family Refinance Question

[Moises Correa]

Hi everyone - I wanted to get some thoughts on refinancing my first property that I purchased in Chicago in July 2020 (it is a 3-unit building and I am living in 1 unit). I financed the property using (i) a conventional loan and (ii) a HELOC on the property that was drawn at close (there are two separate mortgages on the same property).

My plan was to refinance into a 30-year fixed rate product that repaid both existing loans and also take cash out of the property if possible to help fund my next RE investment.

I have been going back and forth on whether to lock-in a 30-year mortgage (loans available up to a 75% LTV) or refinance into an ARM that would allow me to take additional money out of the property (loans available up to 80% LTV). Depending on the appraisal and the loan option I choose, the cash out amount could range from $0 (low appraised value + 75% LTV fixed loan) - $80K (high appraised value + 80% LTV 10/1 ARM). The property value is estimated at $600K - $650K.

There are clearly pros and cons to each side, but any strong feelings or advice from the group would be appreciated! 

For reference, the loans I am considering are listed below:
30-year fixed @ 3.75%; no cash out
30-year fixed @ 3.875%; cash out up to 75% LTV
10/1 ARM @ 3.375%; cash out up to 80% LTV

[Andrew Hogan]

Great points @Evan Polaski and @Arn Cenedella. 

@Moises Correa congrats on your success thus far. 

I'd go for the option that gets you as much cash out of the deal as possible to redeploy into subsequent deals tax efficiently.