Thoughts re: buying investment home with cash out from residence?

[Lisa Bjorneberg]

I am considering buying my childhood home as an investment property. My dad built it in 1962, sold it about 10 years ago and the buyer has been foreclosed on. It is now with Fannie Mae and I have the opportunity to buy it cheap. I don't have much in the way of a down payment and the home could also use some repairs to make it more appealing to renters. My banker mentioned doing a cash out refinance of my residence to pay for the investment home plus needed repairs. What are the + and - of doing that?