Save some funds from cash out refinance for large repairs?

[Paul C.]

I’m not new to BiggerPockets, but new to investing and being active on the forums (mainly a lurker), and I’m changing that today.

I was able to purchase a SFR back in 2019, and the property has been able to build up some equity since then. I've been floating around the idea of doing a cash out refinance to reinvest in another property. I'm eligible to cash out around $150k and thinking of cashing out just $100k so that the cash flow on the property doesn't take that big of a hit. Is it out of the ordinary to cash out a little more (thinking another $10k-20k) and have it on hand for large, unexpected expenses like new HVAC, roof, etc.? The roof and HVAC will be at the end of their lifespans within the next few years. The property could use a little renovation within the next 5 years as well.

[Steve Vaughan]

Rates are over 6% now.  Your rate from 2019 is probably in the 3s?

This cash out will cost you indigestion, $5k and thousands in interest over time.  

I'd save up for the repairs and improvements as I go.