Cash-out proceeds are calculating returns

[Ray Thomas]

How do you calculate your equity basis and returns when doing a cash-out refi? I have a lot of equity built up in my older house (<40% LTV) and would like to get a cash-out refi taking it up to a 60% LTV. Do I count the refi proceeds as equity even though it is not cash coming out of my pocket?

For example if the refi proceeds totaled $100K and my cash equity in the house is $200K is $300K my new equity basis or is it still $200K?

I would like to use that $100K to either do a major remodel, which will increase the market value of the house based on recent comps, or purchase a 2nd property.  I am confused on how to calculate the returns as I am not sure if I need to increase my $200K equity basis under either scenario?