How much to leverage when refinancing ?

[Ryan C.]

I hope I posted this to the right forum?!?! I purchased a duplex for $165k several years ago and owe 136k on it. I current collect $2050 in total rents. I cash flow around $800. The property is valued at around 300k. I’m able to pull out $225k, which in turn lowers the cash flow to roughly $250. Should I do this or leave more equity in the property? This is a first for me fully leveraging a property and lowering cash flow that much. I will be using the money for additional properties. End goal = quit the 9-5 and live on cash flow.

Any direction is greatly appreciated. Thanks in advance!!

[Joshua Janus]

If you can find a property to allocate that 225k to (after taxes) that can produce a cash flow greater than or equal to your loss, than that would be a great move! You end up mitigating your risk a bit as you will now have more doors and be less exposed to vacancy. 

If your goal is to quit your w2 or day job, this is what you need to do! Buy property with the potential for value add or rent raise then increase the performance of the property, wait for it to rise in value and pull your cash out, then repeat! Good work.