Cash out Refinancing Strategy

[Brian Nordman]

I have read in a lot of posts and heard in a lot of podcasts that many investor's strategy is to do a cash out refi to come up with capital to perform their next deal. One thing I have thought about though is when is doing a cash out refi not a good idea? For example, with interest rates going up and really no expectation to come down at some point the rates could get high enough to where refinancing would increase your monthly expenses enough to where a good chunk of your cash flow has disappeared each month. When rates were decreasing and even stagnant this strategy makes perfect sense. But where do you draw the line when the rates are actually increasing and you will be creating a larger payment for yourself?