When Should We Consider Not Refi out of an FHA to Conventional?

[David Healey]

Complicated Question:

We just purchased a Triplex on an FHA in January. We have about 22% equity in the property now and want to refinance out of the FHA into a Conventional product (I believe Freddy Mac will allow us 80% LTV). Our current Interest rate is 3.5% and current Conventional loan interest rates on a 30 year fixed would be approx. 3.8 - 4%. We've considered doing a Cash out refinance to build out another unit within the footprint of the home. But aren't sure about that yet. We know we will lose some money every month (around $100/mo, plus the closing costs of around 2% of the ourstanding value for the refinance), but we want to keep buying multi-families as quickly as we can. Here's my question: Is there a formula you use to know when a refinance would be too detrimental to your REI plan? At what cost should we consider waiting to refi out of the FHA? Hopefully this question makes some sense. Thanks in advance!