Delayed BRRRR: Stuck on 3rd R

[Tim L.]

I have 1 rental, purchased in 2015 for $125k that my wife and I lived in for a year while we rehabbed it. Since then we purchased another primary residence, and we've been renting the original one for $1500/mo for the last 4 years. All is fine and dandy, life is good.

The value on this property has increased to around $180k, and with an $87k mortgage I feel that it's time to refinance out to get cash to purchase another property. I could buy another identical but distressed property as this one (in the same community) for ~$150k, put ~$15k in rehab, and get it rented at $1500/mo. I talked with my mortgage broker, and he was hesitant to give me the green light due to the costs/fees associated with this plan. In his words "you want to do as few transactions with me as possible", saying that refinancing the current rental into an investment loan, probably paying points in order to get a similar interest rate (currently 4.125%), and paying closing costs only to do the same again for the new loan would be wasting too much of my equity on the deal. His advice was to just save up cash until I can purchase a new rental outright with 25% down, or do the same thing we did before and rent our our current property and buy another. His position is that getting the ideal interest rates on a primary residence is too good to pass up for another rental. We could rent out our current property and purchase another, but I'd rather not move right now just to get another rental property under our belt.

Should I get a second opinion?

Napkin math: $180k refinanced at 75% = $135k - $87k (current mortgage) = $48k cash (prior to closing costs)