Best option: Cash-out refinance or new loan

[Pete Harper]

Looking for advice on the best option for funding my next deal.

I'm looking at a 4-plex to purchase in LLC name. Asking price is $165k. I own a 2nd property free and clear worth $280k. I could do cashout refinance and pull equity out of the second property and pay cash for first.

The second option is to straight up do private money financing with 25% down. I'm being quoted 5.75% on 5/1 ARM, 30yr. I like the first option because it helps preserve my savings.