Cash Out Refinance Rates, Amortization, and Strategies in Texas

[Forrest Holden]

I am about to conduct a cash out refinance on a rental property in the state of Texas. The property has a note on it for 61k, I plan to put a new note on the property for around 100k to replace the old note when I conduct the cash out refinance. I have been offered a cash out refinance in the state of Texas for a fixed rate of 5.75% for the first 5 years, adjusting to WSJP + 1.5% every 5 years thereafter with a 20 year amortization schedule.

First question is this, how do these rates look to other Texas rental property investors? Does this rate look high to you?

My next question is this, should I maximize the benefits of this cash out refinance by pulling out as much cash as possible on this property if it does not impact the interest rate? I have several other rental properties that have a pretty good interest rate on them currently as well as a fair amount of equity. If I continue investing in real estate, I believe it would be advantageous to have an extra 10k in cash loaned at an interest rate of 5.75 amortized over 20 years for use in down payments and rehab costs even if it were to hurt the cash flow on just this one property a little when the other properties are cash flowing very well. What does everyone think?