How To Calculate Rental Property with Cash Out Refi?

[Mark Ross]

I have my first rental property I purchased in November 2021. I fixed the property up and was able to get the highest rent in the entire building at $1375 a month. I purchased the property for $135k cash, however now that I am looking to pull some funds out I am having trouble with doing the calculation to see if it makes sense for ROI.

Since my property has only been rented out for less than a year, I was told they can only go off the market price of when I purchased it instead of what it's currently valued at. My question is do I include the closing cost when using the rental property calculator or do I need to include that money somewhere else? Any assistance on how some of you handle the calculator tools when it comes to cash out refi's would be greatly appreciated!