Beginner Questions re: Refinancing

[Ryan H.]

Hi all, I'm considering refinancing and am having some trouble clarifying what terms to pursue.  I'd be interested to hear your feedback regarding my circumstances:

Background:

- I'm a new real estate investor with one rental (SFH). It cash flows about $350 per month. I'd like to buy a second rental.
- I'm self-employed, but I'm generally not able to meet my personal and business expenses via my self-employment income alone.
- I also have a debt obligation to the IRS totaling $10k and at an interest rate higher than what I imagine I could obtain through a cash-out refinance.
- I have enough cash in an Inherited IRA to put towards a down payment for a next rental property. However, that money is taxed once distributed.
- Equity in my primary is 63%.  Equity in my rental is 30%.
- Interest rate on existing loan for the primary is 4.375%.  Interest rate on existing loan for the rental is 4.124%
- Great credit.

Questions that are up for me:

- Should I refinance one or both loans?
- Should I be considering a rate-and-term or cash-out?  If cash-out, how much?

My sense is that I should do a cash-out refinance on the existing loan for the primary to pay off my debt obligation and put the remaining amount towards a down payment on another rental.  And maybe a rate-and-term refinance on the existing loan for the rental.

Thoughts?