Downsides of paying cash then refinancing later for a single family rental?

[Ariella Jacques]

Hello!

My husband and I have saved up enough to pay cash for our first property, which we would like to live in for a short time (~1 year) before getting another property to move into and renting out the first property. We are currently renting an apartment for our own housing. It will be my first time buying a house.

We were thinking of paying cash for our first property and later do a cash out refinance to assist in funding down payments for future properties. However, we are wondering if the interest rate will likely be higher for a cash out refinance on a property we have already lived in for a year and are about to start renting than the interest rate would have been if we just got a mortgage when we first bought the property. Thoughts?

Thanks!

Candace