Should I cash refi my 3.5% interest property for 4.65%?

[Andrey Gorokhovskiy]

Ok here is our situation we are still new to real estate and investing and just purchased our 3rd rental and want to keep moving forward.

Our first property we bought in WA state in 2012 for 130k and now is valued at 400K+ we have a small studio air bnb (converted from a 330sqft garage) averaging $1900-$3000 per month while we are still living in the rest of the house. We also just launched the remaining of our house on air bnb and received our first booking starting in sept since we are moving out. We are expecting to have a gross income of $3000 - $6000 a month on this property. Currently our mortgage plus all taxes and fees equal to $1100 on this property so this is a very hot rental for us.

My question is would it be wise to abandon a 118K loan at 3.5% interest rate and do a refi cash out at 4.65% for 300K and take that 182K and invest it into more properties or leave it as is.

A 300K loan will raise our monthly expense from $1100 to $2200 on this house which is still well under what the property is producing in passive income. 

As a investor and a desire for acquire more properties it seems like it is the right thing to do. What do you guys think?

[Thomas S.]

If you can not get a HELOC then cash out is absolutely your best option. 300K invested at 10% (opportunity value) is worth $2500/month. That is how much you are presently losing monthly having dead equity dying a slow death in your property. With an additional cost of only 1K per month you would be crazy not to access that money immediately to reinvest.

Equity in a income property is where cash goes to die. If you wish to continue expanding your investments ignoring the fact that you have all that money doing nothing is a sin.