Should I refinance or let it ride?

[David Soleymani]

Hello everyone. This is my first Official post. I will try to be as descriptive as possible.

I own a SFH in Virginia Beach that I purchased 7 years ago with an ARM. I'm currently paying 2.375% interest and it's set to change Nov 1st. I bought for $200k and currently owe about $180k. I'm receiving $1125/mo and expenses are $1035.

So with this in mind, I have been debating on either sitting on this since my interest rate is so low or refinancing and taking advantage of some more cash flow. I originally figured I would wait to refi when the ARM adjusted to a higher %.

I'm a little stuck here.

[Devan Mcclish]

You can't refinance and pull money out. You're already leveraged on the property up to 80%. No bank will let you exceed that. You can't refinance lower without bringing money to the table. They are not going to let you refinance from 180k in debt to 150k in debt. They would be losing 30k on that. and you can't lower your mortgage by getting rid of the ARM. You have to bring money to the table to do that

You have three options here. 

1. Keep renting it and keep breaking even at the current rate. When rates go up, you will start to lose money.

2. Sell it - which is what I would do because this isn't a very good cash flow deal anyway.

3. Refinance and lose money because the rate will go up.