Is there a reason not to refinance?

[Cyrus O.]

Hi everyone. I’m a new investor so I’m hoping to avoid any major pitfalls before my first big splurge.

I currently have a mortgage on a home that I still owe $207k on. However, the home’s “market” price would be around $750k post renovation. Currently it’d probably be appraised at around $550k~.

I currently have about $60k cash on hand. So, my plan is to refinance the home. Can probably get my rate down from 3.75% to 3.2% and I have been thinking about pulling as much money from the mortgage as possible. That way I can renovate the house. I have a friend who will do the whole thing for $70k to bolster it back to market value. Then I have money left over to purchase another property (my first). If I don’t refinance, I’d be stuck spending all my on hand cash renovating and be waiting for income to purchase another property.

Is there a reason not to do this? Will have all this debt cause me issues with acquiring another loan for a new property? Just want to set myself up for success in getting my first real rental property.