Cashflow OR Appreciation

[Nick Winfrey]

Cashflow OR Appreciation?? Need advice on cash out refi or leave as is...

Details:House #1 purchased in October 2020 for $150,000 using conventional finance, 20% down and 3.75% interest for 30 years. Currently rents for $1,600 and cashflow $600/mo.

House #2 purchased in March 2021 for $155,000 using conventional finance, 20% down and 4.25% interest on 5 year arm over 20 years. Currently rents for $1,550 and cashflow $300/mo.

House #3 purchased in January 2022 for $160,000 cash. Currently rents for $1,650 and cashflow $1,650 (cash purchase).

House #4 purchased in March 2022 for $124,000 using conventional finance, 25% down and 4.75% interest on 5 year arm over 20 years. Currently rents for $1,500 and cashflow $300/mo.

Option #1 Local bank offering cash out refi on House #1 and House #3 for a 25% down, 4.75% interest on 5 year arm over 20 years. This would value House #1 and House #3 at $412,000 (a $102,000 appreciation). This would essentially allow us to pull 100% of our cash out of House #3 and an additional $34,000 out of House #1. We would use that money to cover 100% of the down payment on House #4. This would leave us at $950/mo cashflow for 4 houses, 2 of which would be $0 out of pocket and infinite COC.

Option #2 Same as #1, except leave House #1 on the 30 year 3.75%. This would leave us at $1,400/mo cashflow for 4 houses but would require coming out of pocket $31,000 for House #4 down payment. The $500/mo extra cashflow would payback the $31,000 in 5 years (in a prefect world).