Should I refinance to pull cash out and buy another property

[Josh Darley]

Hi BP, I'm new to this forum and have found it to be very useful so far. I am seeking some advice on refinancing two properties I've owned for about two years. Each SFR was purchased for $155k (20% down) and cash flow between $325 and $425 respectively each month. The value of the homes has gone up significantly in the time since we bought them. They are currently worth roughly $190k. I have been thinking about refinancing to pull some cash out to find another property. Current loan interest rates are 5.375 and we have the option to bring them down to ~4.5% since rates have dropped so much over the last year. From my calculations I can walk away with about 16-18k for each property (leaving 75%LTV) and only reduce the cash flow about $150 a month each. Do you think this is a wise choice? With the extra ~35k I can find two condos and cash flow a couple hundred bucks to make up the lost cash from these homes. It seems logical, but is this over-extending? Any advice would be appreciated.