Is it too risky to cash out refy and lower my cashflow?

[Mikhail Abbott]

So I am looking at pulling some equity out of my rental house in texas and purchasing another rental

So this property brings in $225/mo of cash flow on top of saving 15% ($279/mo) for vacancy, repairs and capital expenditures. I self manage for now.

I got a quote to do a cash out refy and pull out roughly 37k but it increases my mortgage payment thus reducing my cash flow to $38/mo. With total closing costs and paying off the loan balance on an air conditioner that leaves me around $30k.

The difference in cashflow between the two is $187 a month or roughly $2237 annually

My question is, if I can use that 30k to purchase another property that brings in at least the same annual return, is it worth to run my profits that low on the initial investment?

The 30k would possibly sit for a few months until I save up some more and find the next property

Anyways would love to here what you guys think. I’m leaning toward doing it but not sure if thats too risky with the current market/economy etc

Thanks,

Mikhail