Hey all, can someone check my numbers and logic for using a cash out vs purchasing my next property out of pocket?
Current duplex, assuming an appraisal of 150k
Current Loan
$390 @ 4.25%
Cash Flow (w/ 40% proforma)
$659/mo
Appraisal
$150k
Current Loan balance
$77k
Cash Out (-fees)
~$23k
New Loan
$470 @ 3.5%
Just went under contract for duplex #2
Purchase Price
$127k, $2k concessions
Purchase + closing costs
$37k
Cash Flow (w/ 40% proforma)
$315/mo (10.16%)
Am I correct in thinking that the cash out refi is essentially me accessing $23k by financing another $960 annually, at 4.17%? As long as my proforma is correct and I can get 10.16% on that cash it makes sense to refi, or am I doing some math wrong?