Buy another duplex or pay off rehab debt?

[Tara Davis]

Hi all,

I'm a newbie in Michigan...just bought my first duplex 6 months ago. I have a great tenant in one side who is 6 months into a 2 year lease and I live in the other side. I'd love to buy another duplex after my one year minimum occupancy is up on this one, but I have about $12k in rehab debt. The current mortgage is a 5 year ARM. Would it be foolish of me to refinance in 6 months and take cash out to purchase another duplex? (One that needs less work) I want to be aggressive, but not stupid.

Thanks for your help!