Cash out refinance, or sell second property?

[Wyatt Huber]

Hello, im new to the forum. Hoping to get some opinions.

I currently own two homes, one i live in the other i rent out. I want to upgrade to a better home for myself. Trying to decide if i should cash out refi the one im living in or sell the rental property and take the equity to get a new home, and rent out the current home im living in leaving me with one rental. If i cash out refi i will have two rental properties.

I spoke with my lender and we did the math. The home i live in is a low interest loan and i only owe another 40k on it, will be paid off within 4 years. If i cash out refi, its going to cost me 259k in interest to take out the 150k to use for a down payment. Leaving me with a payment including taxes and insurance of about 1600 a month for another 30 years. It will still be cash flow positive as it can rent for 2200-2300. Leaving me with roughly 600 a month in profit. If i dont refi the property, in 4 years it will be about 1900 a month of profit after taxes once paid off.

The property im renting out now has 180k in equity currently (enough for 20% down on next house). This property is currently 600 a month cash flow positive as well with a low interest.

Given the numbers above. I would like to hear opinions on cash out refi, keep two rentals, and acquire the third home that i would live in, or sell the one rental to use equity to acquire my next home (which i would live in) and rent out the home im currently living in which will be paid off in 4 years, leaving me with one rental property instead of two.

Thanks for reading