Put additional 5% in Rental Property or keep cash for addtl investment opp

[Danny McGreevy]

I have an investment property currently with 20% equity, which I am owner-occupying in Portsmouth, NH.  I am reaching the point that I will be moving to a new property which I have saved up enough cash for.  I am still in the search phase there.

In my current 4-unit building, I have a 7.3% rate and this is going to be the final opportunity I have to refi w/ an owner-occupied rate since I plan on purchasing a new property soon to live in.  The Mortgage broker advised me that if I put in an additional 5% (25% total) I will be able to get the rate down to 6.3%

Doing the math, if I've done it correctly, seems to indicate that the additional 5% added to the equity would generate a 17.5% return on the additional cash flow of the property.  Again... If my math is correct.

My issue is that I often read that BP community many times finds it better to keep low equity in investment properties to keep cash free to purchase additional rental properties.

What are my biggest considerations when making a decision here?  Am I missing anything?

[Greg Ruff]

Quote from @Joe Villeneuve:

Quote from @Greg Ruff:

Great question Danny and in this situation, I think you can have your cake and eat it too. 

Refinance the mortgage down to the 75% LTV which will save you 1% on the rate but deplete some of your cash, then use a HELOC to recoup the 5% + gain an additional 5% if you find a bank, (Bangor Savings) that is able to lend up to 85% LTV on primary residence HELOC's. We have a program that will allow you to do both the mortgage refinance and HELOC closing at the same time so you don't risk losing precious buying time in this market. If you haven't guessed by now, I'm a lender with Bangor Savings, message me if you want to chat more about it!

Dollars?  What does all this end up meaning in dollars.  Talking in percentages tells you nothing.

 Always good to work in dollar amounts, since dollar values weren't included in the original post I don't have any dollar values to work with here.