Would you own rental properties free and clear (No mortgage)

[Pablo Pozo]

Hello biggerpocket members,

Me and my wife are still relatively inexperienced in the world of Real Estate investing. I considered my self a conservative guy and my strategy is to buy and hold.  I have one rental (rental 1) and our primary home that is under my name along with the mortgages. We recently bought another rental (rental 2) back in June and put under my wife's name and the mortgage is under her name as well. I recently called my bank to see if I can refinance my primary home that has an interest rate of 5.75% 30 year fixed. It turns out that they offered me a rate of 3.25% 30 year fixed rate and I have enough equity to pull money out and pay off the (rental 2) property we recently purchased in June under my wife's name, which the current rate on that rental is 5.25% 30 year fixer. My dilemma here is that in the event that me or my wife were to get sued, that property would have equity that is not protected. Right now the equity is on my primary home which is protected by Florida homestead. With this refinance I will be saving a lot of money on interest rates but on the same token I will be exposing my equity. I will be consulting with my lawyer next Friday but I want to hear the opinion from and investor's perspective. Thank you in advanced and I wish you all a happy new year with a lot of success.  

Best regards,

Pablo