$174k / year in cash flow vs $730k cash out and $100k / year cash flow

[Account Closed]

Hey everyone I'm on the fence on one of my current deals on weather to stick with the high cash flow or cash out refi to invest in the next deal.

In short I purchased a 32 unit property last February with a monthly rent roll at the time of closing of $30,200/month. At this time I've raised the rent roll to $42,000/month.

Current Bank Debt

5 year fixed rate term @ 4.25% 25 year amortization with maturity date of January 2027

Net Cash flow after debt service $174,520.00

Loss to lease $5,104.00/month (will chip away at this on a monthly basis)

Agency debt refi (freedie)

Cash out $730,000.00 and own 1 outlier 4 unit free and clear (value of outlier $450,000.00)

10 year fixed rate term @ 5.85% 30 year amortization

Net cash flow after debt service including the paid off 4 unit $104,137.16

Loss to lease $5,104.00/month (will chip away at this on a monthly basis)

Looking for some input from other multifamily investors.

Thank you!

[Evan Polaski]

Your equity sitting in the deal seems to be earning you about 10% Cash on Cash (71k cash flow difference on $730k equity).  Can you replace that with another deal and is it worth the additional work to source and manage another one?

As comes up one these forums time and time again, it depends on what you want. Eitherway you are in a good position, it seems. As Greg noted, if you are in growth mode and think you can more than replace that 10% ROI with another deal, refi and start hunting. If you are tapped out on wanting more work, let it ride and enjoy your strong cashflow.