Cash out refi or heloc?

[Ben Ryder]

So I bought my first house in 2018 for 282. I put 3% down. After buying house was worth 320k.  At first I wasn't planning on investing until I realized the potential. Long story short the house was dated and I redid about 90% of everything. I only put around 30k but did major cosmetic and construction fixes such as adding closets to two rooms without closets. 

Well I am refinancing because I have a 5.3% interest rate. My payment is now 1820 after the first year from 1720. My lender said I can get an appraisal waved and it came back at 375. Should I do a regular appraisal? Because it came back at 375 I can pull out 30k. My payment will big around $50 cheaper with the cash out refi. My other option is a heloc which my payment will drop $300-$400. With my heloc I can pull up to 60k according to the lender. I plan on reinvesting the money into another property if I do a cash out refi. Im not sure how heloc wo uld work since paying interest on the payments?

So my current situation is that I rent out 4 out of the 5 bedrooms in my house. I get $2500/m. I pay for utilites which is a bunch. But I think right now i am about l iving for free. If I do a regular refi I will make 300-400/m cash flow vs breaking even(living for free though). If I move out my room will rent for around 750. Which that ill be cash flowing around 1k/m or with the cash out refi ill be probably cash flowing 500-750/m. 

Thoughts?

[John Warren]

@Ben Ryder once you lock that HELOC in you should be fine. I have heard of some banks pulling back on unused lines of credit at least anecdotally. I have not personally had anything like that happen though.