Cashout refi vs out of pocket purchase?

[Joseph Colliu]

Hey all, can someone check my numbers and logic for using a cash out vs purchasing my next property out of pocket?

Current duplex, assuming an appraisal of 150k

Current Loan	$390 @ 4.25%
Cash Flow (w/ 40% proforma)	$659/mo
Appraisal	$150k
Current Loan balance	$77k
Cash Out (-fees)	~$23k
New Loan	$470 @ 3.5%

Just went under contract for duplex #2

Purchase Price	$127k, $2k concessions
Purchase + closing costs	$37k
Cash Flow (w/ 40% proforma)	$315/mo (10.16%)

Am I correct in thinking that the cash out refi is essentially me accessing $23k by financing another $960 annually, at 4.17%? As long as my proforma is correct and I can get 10.16% on that cash it makes sense to refi, or am I doing some math wrong?

Thanks!