Can and should I CASH out?

[Matt Hummel]

I bought an off market 3 plex that was used for one family to live out of, they owned all the units and lived in them all. I bought off market for what I am pretty sure was about 70k less then I thought it was worth as a house in the area. I bought it for 370k and have all the units rented out for year contracts at a total of 3850.00 a month. Also, my insurance company after looking at it, had me insure it for 511k calculated rebuild cost, it also sits on 2/3rd acre in a nice area...

I think i know my answer but before I go look around I wanted the opinions of others, Can I do a cash out refinance now that I have it rented even though its only a 3 plex and not a commercial property, according to my bank who classifies them as 4+? Any additional info or opinions would be appreciated !

thanks in advance

Matt 

[Brian Lipszyc]

@Matt Hummel I used to work for Progressive Insurance and can tell you that rebuild cost is typically not going to match appraised value. Material costs, labor costs, demolition costs are all factored into what an Ins co. will value a property at. Only a lender (and their appraisers) can tell you what they're willing to value it at for LTV purposes.