Refinance to increase cash flow before future 1031 exchange

[Brian Winn]

Hi all,

My wife and I have live in Boise and have an investment property in Twin Falls that we put into service about 6 years ago.  Our goal in real estate is to have enough monthly cash flow to pay for our primary mortgage each and every month.  We are currently listening to podcasts and reading forums when we have time to educate ourselves.  

In the meantime, our question is about a refinance on the rental property in Twin Falls.  Is it worth it to refinance and recast the loan if we are looking to do a 1031 exchange to a property here in Boise/Meridian in the next 2-5 years?  The refinance will bring in about an extra $165/mo as we have 4.625% now and can maybe get down to around 3.5%.  I figure it will take about 2 years to pay off the refinance and the current family just signed another 12 month lease beginning July 1st.  Monthly payment is $882 and will now rent for $1135/mo.  

Also looking to buy another primary residence in the next 3-5 years as well as our current house that we live in now has great cash flow potential.  

Any thoughts comments would be greatly appreciated.  

[Kyle McCorkel]

Brian Winn I would recommend looking into the interest rate a little more. I doubt you would be 3.5% or even close (for investment property). You would probably get closer to 4.5% or even 5% at this point.

That might make your decision easier.