Need some opinions on which path forward

[Bernard Walter]

Hello,

My name is Bernard and I want to move more into real estate. I currently own a townhouse(primary) and a property with two 1920s beach cottages that are currently rented. I have owned the rentals for 2 years. Currently I’m at 6.75% and it cash flows about $100 a month. Till insurance sky rocketed this year. Did some wind mitigation so insurance will come down some. Will still need to raise rent to cash flow. 

I looked into getting a cash out refi. Right now the Mortage is $3668 and should go down to about $3,480. The refi would raise the Mortage to $4,400 but I will get $103,000 after everything. 

The back house is rented at $1750 and the front at $1600. The front house is rented to my friend who also kinda acts like a property manager. Don’t really want to raise his rent $500. The back house lease is up in June. I’m pretty confident I can raise that rent to $2200 but the tenant is a great tenant and pays right on time. If he decides to leave I am not worried about renting it to some one else. 

I don’t want to take a chance ruining a relationship with my friend so if I did a cashout refi. I would be paying $500 a month myself.

My primary residence is at 4.25% and I can also get $100,000 equity from a cash out. It would raise my Mortage about $500 an month. I was thinking of refi on both properties and purchasing a couple duplex or multi family. Don’t necessarily want to refi my primary because I only owe about $100,000 on it. 

Please can some one help with some guidance? 

[Greg R.]

So the two beach cottages are at 6.75? Even with high rates you can probably refi down into the low 5's and instantly increase your cash flow. That would be first order of business for me if I was in a 6.75.

Must be a good friend to lose $7-8k a year on him.