Should I Cash-out refi my personal home?

[Dan Maranto]

Hello everyone, first post here! 

I am looking to start purchasing multi-family real estate to start building my portfolio. About 5 years ago I got into my personal home for a great price. I now have about 500,000 equity in it.

I did a conventional 15 year and have been paying a ton extra every month to pay it off. I have about 4 years to go until it is payed off and that was my goal. But after doing so much research about on real estate investing, I am thinking my easiest way to get into it would be to do a cash out refi, pull out approx 300,000 and that will give me more than enough to get started (down payment, possible rehab, etc)

Even with higher interest rates now, if I pull out 300,000, my new mortgage payment will be right around what I am paying now (including the extra I’ve been paying to pay it off)

I feel as though I will be able to build wealth quicker going this route, than I would be able to if I waited 4 years, payed the house off, then started saving for investments. Also, it would be much easier than finding a private lender, hard money, etc.

Thoughts?

[J. Mitchell Bernier]

The big question I have is, how do you feel about debt? From the sound of it you are risk averse to debt, 15yr personal mortgage and paying extra. If you are risk averse,  will you be ok with the added debt on your personal mortgage? I personally would do the cash out refi on my home even with the higher rates because I believe I can make higher than 5%-6% return on my money, but I am also not worried about my overall debt load. 

So just make sure that the added debt on your home doesn't make you lose sleep at night. If it doesn't go for it and I think you will do well. If if does cause you to have concern, then stick to your original plan. There are a thousand paths to creating wealth, just find the one that makes the most sense to you. 

Hope this helps and good luck!