Help me Understand Cash Out Refi for next Property

[Saurabh Kukreja]

Hello , 

I have a rental property in memphis and now planning to get second one.

I need to understand if I cash-out-refi my first property and put the cash downpayment on second one , Should I consider that as 0% downpayment Or 20% downpayment to calculate if the numbers make sense.

Also suggest if I should do it at this point or wait some more time. Here are the numbers:

Property 1:

Purchase Price - 130k 

Current Zillow Estimate - 166k

Loan Remaining - 100K

Current Interest Rate - 5%

If Refi - 6.38%

Obviously at higher interest rate my EMI is gonna increase , but at same time I am adding an additional asset which would cashflow as well. OR make the downpayment from out of pocket and refi later when interest rates go down ?