Can I do better? (Cash Out Refinance)

[Jay Patel]

Hey guys, 

So I am trying to cash out, refinance one of my rental properties. A little history: I purchased this property back in Feb 2016 for $50,000 with $800 closing costs (All in: $50,800). I have 100% equity in this property with no current mortgage. I have been talking to my small local bank and these are the terms they are offering: 

Loan Amount: $60,000 (I'm assuming they appraised at $80,000 with 75% LTV - this was not stated specifically)

Am: 15 years

Rate: 5% fixed for first 5 years, then 1 yr treasury + 350 points (5% floor) 

Monthly payment: $477 (approximately)

Here are my numbers on the property:

Property Curently Rents for $935 a month:

Monthly Expenses
P&I	477
Property Tax	104
Insurance	52
Vacancy	80
Maintanance	50
Cap-EX	150
HOA	0
Property Management	0
Total:	913
Monthly Cash Flow	22
Yearly Cash Flow	264

This would allow me to pull out more than I put into the property. I don't have any deals lines up per say, but I could begin searching for the next deal with these available funds.

My questions are:

• Can I do better with the terms/rate of the loan?
  • The variable rate after the 5 years scares me a little given the feds will probably be raising rates

Please let me know your thoughts.