Need Help with Cash Out Refi Situation

[Andy C.]

Hey Everyone, I need some of advice from the BiggerPockets community. Like many other California investors we are extremely lucky to have a property that has appreciated over the last few years. The property that I own has appreciated over 100% from 600k to now valued at around 1.2 or 1.3M. It is locked in at a 3.25% interest rate 30 yr fixed. I know we have a few options that include 1031, selling it and getting the 250K or 500K (we are married) tax exemption, and lastly potential keeping the property and cash out refi. My question is.... If we decide to keep the property and do a cash out refi we would be able to pull out a few hundred thousand. (But at a higher interest rate) In the worst case scenario if the market were to correct and the value drops (similar to the 2008 crash), what are the repercussions or consequences of having spent some or all of that cash from the refi out? If the rent still covers the mortgage and we can use the cash to leverage for other acquisitions can anyone share the positives or drawbacks from their point of view? Has anyone had any experience with a similar situation?