Should I cash out paid-off rental?

[Jason Wang]

Hello BP,

Curious to hear your thoughts on whether I should do a cash-out refinance on a paid-off property to acquire another property, or to just start a new purchase loan instead. Currently I have three rental properties as shown below.

Property A: Paid-off rental; cash flow $1,200/month; market value $360,000

Property B: On a mortgage (30% equity); cash flow $200/month; market value $280,000

Property C: On a mortgage (10% equity); no cash flow (huge potential for appreciation); market value $230,000

Things that I'm taking into consideration:

- If I choose to start a new purchase loan, I have the option to apply for owner-occupied loan (30-fixed), which should help me get a lower interest rate and down payment requirement (thinking 10% or less)

- Cash position: $20,000 - $30,000, meaning I won't have much cash if I chose to apply for a new purchase loan as down payment will eat 50%-70% of it

- Income/credit: $85,000 pre-tax; 730+ credit

- What if I can't find a deal to purchase after cash-out refinance? What to do with the cash until I find a property to purchase? I feel like stock is too volatile to put this fund into.

Thanks,

Jason