Cash Out Refinance Nightmare, Help Me Make Sense of It

[Paul O'Connor]

Ok, so a little bit of backstory. I have 5 rental SFHs that I'm trying to get refinanced to do a way after the fact BRRRR. (Sorry, I discovered Brandon Turner and BiggerPockets well after I had purchased most of these)

The houses are all owned outright, all of them are currently rented, with paying tenants. I wish I could upload my spreadsheet that I created, to show you the numbers more easily.

So... here are the current monthly numbers (remember, these houses are owned, free and clear, no mortgage). 

Rent: $6,175 (from all 5 houses combined)

Expenses: $2,906.31 (Property taxes, property insurance, umbrella insurance, vacancy (8.33%), and maintenance (16.66%))

Profit: $3,268.69 

So... here are what the numbers are after the refinance. 

Rent: $6,175

Expenses: $7,159.44 (above listed expenses, mortgage then $12,500 in yearly flood insurance and closing costs divided by 360 months)

Profit: -$984.44 (no profit, it's a negative $984.44 per month)

Net Cash Out from Refinance: $560,087.63

Interest Rate: 4.00%

I'm doing 75% LTV loans, and closing costs for the 5 houses is $58,511.79 (this number includes points). What screws me is the flood insurance that the lender is requiring me to obtain on 4 of the houses. Average cost is $3,124.85/yr between the 4 houses (totaling $12,499.41). That's what crushes the deal in my eyes and drives me into negative cash flow.

I feel like I'm missing something from a certain angle that I'm not taking into account or there is an aspect that I'm missing. I just wanna cut my losses not ($2,233 already paid for flood insurance, surveys, and elevation certificate) and walk away from the loan. 

Would you go through with these loan? Do these numbers work for you? If yes, please explain. What I'm looking for, is a reason not to cancel the loans. 

Thank you for your help!