Should I cash out on my refinance to buy another property?

[Alan C.]

I am refinancing a duplex and can buy down points to get a 3.125% APR on a 30 year fixed mortage (will cost me $11k to buy the points). This will be a long term hold investment. If I went through with this option, I would be positive cash flowing $750/mo on this property which is very enticing.

The other option would be to cash out ($110k) but the rate would go up to 3.875% APR and it would cost me $17k to buy down the points. This would put me in a cash flow neutral position.

I was planning on retiring in 3-5 years and so the positive cash flow would be very helpful then, but if I cash out, I could use this for the down payment on another property. 

My opinion is that inflation will be sustained for at least the next 5 years, and that I could grow more equity during this time while real estate values go up...and then when I finally retire, I can sell one or more of the properties, transfer it via 1031 exchange into a Delaware Statutory Trust, and maximize cash flow then.

What do others recommend if they were in the same position?

Thanks!