Should I Do a Cash-Out Refinance On My Primary? Thinking out loud

[Christopher Aguilera]

Greetings Everyone, 

I've been contemplating selling or doing a cash-out refi on my primary residence (Townhouse) here in Southern California and trying to capitalize on the equity my home has generated over the past couple of years. 

I wanted to get some opinions from seasoned investors and see what would you do in my situation.  My Real Estate goal is to buy and hold 10 doors and pay them off as soon as possible. 

With that in mind here is my situation:

I recently was contemplating selling my primary residence (Townhouse) due to my growing family and rolling my gains into an SFR which would easily cover my 20% down payment and still have an extra $140K for investment purposes. but I dismissed the selling idea mainly because the areas where we could afford to live were areas we don't want to live in. Mostly due to commuting distances, schools districts not being up to par, and our mortgage would easily double.

At the same time that I was thinking of selling my house, I was able to lock my interest rate for the cash-out refi because the interest rates are going up in the coming months or years; and maybe then a cash-out refi may not be an option. Anyway, I would get about $140K out for investments and future buying power, with only a slight bump in mortgage (+$675), still keep a 61%LTV and if I ever decide to rent this place I would conservative cash flow around $300. Which I know is the way to go but I'm experiencing a mental block and pulling the trigger. my inside voice is telling me that I'm afraid to make a big move like this, of making a mistake and mismanaging the money, and not meeting or exceeding my real estate goals. My inside voice is saying to not do anything and keep my low mortgage payment, pay off the mortgage sooner and get higher cash flow when renting it out in the next 5 years.

Anyway, I'm thinking out loud and hope someone can relate or has been through this situation and can chime in with some investor experience and how to overcome these mental blocks!?

 Below is what my refinance would look like if I do the refi.