Cash out Refi on rental property using COC ROI method

[Alexander Churchill]

Bought a rental in December 2018, got it for a bargain. Put a roof on it and now Zillow has it estimating at 50k more than what I bought it for, put 25% down plus another 10k for the roof which puts me around 35k total in when looking at it through the COC ROI method. Never done a BRRRRR before personally but I'm guessing this is kind of how it works? My question is that if I Cash out-Refi, that technically would mean that the property already paid itself off in terms of COC right?

[Alex Forest]

@Alexander Churchill What kind of rates would you be looking at with the new refinance loan? Funny, I have almost an identical situation, dec 2018 purchase, new roof, and looking at cash out refi. With the rates as they are, I was quoted a 1.5% lower rate than dec 2018, so in terms of cash flow, I think it will be only $100 more per month after pulling out $35k roughly (still leaving several hundred in cash flow). I like the idea of recapturing the cash put into it, and having more in reserves or for use on something else.  Fyi, on sept 1, Fannie will start charging 0.5 bps on cash out refi apparently.  Not a game changer but an annoying expense.