Real Estate Investment Advice

[Paul Kwan]

My first post but I've been lurking for awhile. I would like to thank all the members that have created this great resource.

I am looking for some input and critique about my planned strategy going forward.

I currently own my home in the San Diego area. My plan is to take advantage of this real estate opportunity to both buy a larger property and hold onto my current home on as a rental.

I have a fixed 30 yr @ 5.85 on my property that is worth about 555k. My mortgage is now about 390k and I am 6yrs into the loan.

I would like to buy a larger home that's about 750k. I would like to refi the current home to 1) cash out some equity towards the new home 2) Bring down the monthly to minimize neg cash flow 3) Keep my new mortgage under the tentatively proposed 630k conforming limit.

Under the current market conditions...would it be advisable to change me current 30yr fixed to an ARM to help in bring down the payments?