Should I cash out refinance while I'm living here?

Question

So it's a house that was my primary residence for 2 years, then a rental for 4 years, then back to a primary residence for 2 years and counting. I moved back into...

I'm considering cash out refinancing the property to tap 150K equity on a house I put 11K down for almost 8 years ago...My cash flow is 1K a month after all expenses and budgeting for vacancy, capex, etc. IF I rent it back out, which I may do in the future. My interest rate is 3.25%. I do not have PMI anymore, that was removed.

The cash flow would be nice, but so would the equity. That said I'm sitting on close to 800K cash as it is. I own other houses as well. I'm pooling cash for new opportunities.

-The house would still cash flow but drastically less if I refinance while living here then rent it back out.

-The amortization schedule would start over but I don't really want to hold houses forever anyways due to capex (last year I put a 13K roof on, plumbing and siding, appliances, flooring, etc are going to be next as they fail and wear out, galvanized plumbing, etc.)

-I will have made 13 times my down payment back from the cash out, much more if I count rents received over the rental years.

-I don't NEED the cash, but would prefer not having to rely on purely a 1031 exchange to use the money to buy deals due to the tight timelines for identifying and closing.

-The cash would lose value while I hold it. But it's not being to good use sitting in the house either.

-I have another house or two that have enough equity for me to do this with.

-Like I said although the CF is nice I don't know if holding the place forever is a good idea since it will need more capex soon.

-It's in a not so great neighborhood. Decent but blue collar.

Gary Roberts · Answer

Hey Jack… sorry… been working… First of all.. there is a big gap between broke and 800K in cash and one…maybe two or wait…maybe a third house… lol. Being new here does not necessarily equal not educated on the topic at hand and you sir… know the answer to your question on what to do. (Having 800K in cash and 1-3 houses (if needed…again.. lol) Me being somewhere between broke and you and jealous… doesn’t change the fact that you were indeed humble bragging. Look it up. IT IS TRUE…I’m not in your situation however please post to me examples of people pulling money out of a property when they already have 800K in cash… I’ll wait. I’ll go as far as to say it isn’t common to do with one house let alone…maybe “another house or two”. If you didn’t wait to add that info at the end it would not have seemed as humble braggy to me. Like just the facts : 3 houses with x equity and sitting on 800K in cash… thinking of taking out equity but not sure… because 800K is earmarked for something….

Hamid Sedaghat · Answer

Agreed. If you can make more than your interest rate in another investment, and you're comfortable with the risk of the second investment, then you should.

Christopher Lombardi · Answer

As long as your living there, it would probably make sense to cash out refi and put that money into other properties. Its not hard to find deals that make more than 3.5% per year so if you are borrowing money at that rate, I highly recommend taking all you can out and put it into other deals. I did the same thing for the house I live in. I'm not living here forever either so I was able to get my rate down further by doing a 10 year fixed then it converts to and ARM. I know I wont be here for the full 10 years so it doesnt matter that it converts to an ARM down the road.

Jack B. · Answer

Why is it newbies on here and broke people on reddit always say you're humble bragging when you are just asking a question and giving information people need to give informed advice. Sit and read if you have nothing to contribute other than personal attacks and jealous posts. Every single time I go through posting history of such people they are broke as a joke low wage people. Last guy on reddit was unemployed at 29 and living on his sisters couch after losing his minimum wage job...so of course he had to attack me with a nonsensical post like yours that doesn't actually bring any value or answer my question... I'm considering doing this with a few of my houses that have enough equity. Asking others who are actually accomplished and have knowledge what their thoughts are on this strategy.The point about 800K in cash, jealous guy, was that I have cash as it is, so should I do this or not, etc. The rest of the details were about the financial details of cash flow, interest rate, etc. so people can actually give informed advice as to whether I should or not.What a joker...

Gary Roberts · Answer

Were you trying to humble brag while asking this question? I'm new to this forum and take it that you know exactly what to do but want to show off...lol. Should I do this..blah blah blah...oh by the way 800k in cash...continue continue oh by the way I have another house or TWO that I could do the same with. hahaha...good luck with your tough life choices.