Cash out refinance, rent out, then move from primary residence - or Sell and move?

[Byron Slaybaugh]

Hey all - new to BRRRR community and looking for some help here. My wife and I are getting our house in Austin ready to sell. We have a great deal of equity in the house and have completely renovated it while living here the past few years. In talking with our agent about listing prices, our equity currently sits at around 240k. Am I way off base in thinking about doing a cash out refinance instead of selling and then rent it out? Ran the numbers on the BRRRR calculator but I feel like something is off on my end. Says we would be negative -350/mo but if we do a cash out refi, we would lower our mortgage 1k per month (currently have a 15yr fixed). What am I missing? Looking to rent out the house in Austin for positive cash flow and then take the rest of the cash out refi to put on a new home in another state. Thoughts? Am I off base here, should we just sell? Thanks!

-Byron

[Devin Peterson]

Quote from @Byron Slaybaugh:

Hey all - new to BRRRR community and looking for some help here. My wife and I are getting our house in Austin ready to sell. We have a great deal of equity in the house and have completely renovated it while living here the past few years. In talking with our agent about listing prices, our equity currently sits at around 240k. Am I way off base in thinking about doing a cash out refinance instead of selling and then rent it out? Ran the numbers on the BRRRR calculator but I feel like something is off on my end. Says we would be negative -350/mo but if we do a cash out refi, we would lower our mortgage 1k per month (currently have a 15yr fixed). What am I missing? Looking to rent out the house in Austin for positive cash flow and then take the rest of the cash out refi to put on a new home in another state. Thoughts? Am I off base here, should we just sell? Thanks!

-Byron

Byron,

You really must ask yourself (and your wife) of course, what it is that you really want. NOT selling your current property and doing a cash out to scale into another investment will only help you in terms of growing your passive income position, obtaining multiple mortgages is considered good debt, you also will continue to have a pool of equity to tap into as you need it as opposed to a one off sale. Again, these are questions nobody on BP can answer for you, but if it were me, I would totally cash out and find a tenant as opposed to completely disposing of the property because I may need some leverage in the future that I do not know I need at present time.