Refinance for lower mortgage payment and cash out for capital

[Account Closed]

Hi everyone, this is my first post so I apologize in advice if I'm making a mistake. I am new to investing in real estate and upon researching, I found this forum very helpful in learning insights. However, I have some questions that I would really appreciate to get feedback on.

I currently own a multi-family home in New York. The house is currently a two family, R4 zoning and in need of a complete renovation. I currently have a high mortgage payment, which is about $3080 per month with 20 years remaining. The remaining balance is about $355,000. Now as I said, I'm quite new to this so I'm trying to play my options right and see what the best move will be. Refinancing for $355,000 can bring my payment down to $2000.  Now if I refinance it for $500,000 which gives me capital to renovate I am looking at about a $2600 payment. The upside about renovating is that, both units will be new and there will be rent-able parking spots for 4 cars. Rent in this neighborhood for a 2 bedroom goes for at the bare minimum $2,000 (can get $2000 to $2400). I believe this may be a good option but I would really appreciate to get feedback/advice on this and maybe if there are other ways to go about. Thank you for your time.

[Andrew Lenis]

Hello Dino,

I would like to start off by saying welcome to the BP community. It seems that this is a common situation that home owners in New York are coming across. I currently have a client who is also refinancing his mix use properties in Queens, so he can lower his monthly payment and  take cash out. But the rout he decided to take is buy distress properties in South Queens, fix them up and rent them out.  South Queens is seeing a very high number of foreclosures,  so we see an opportunity in that market. 

Based on the information you have given, I can agree that it's a good option. You are lowering your monthly expense and increasing the rents. The only thing I would  advise is to make sure that you are 100% sure you can get those rents.