Pulling out equity for repairs

[William Baptist]

Hello Guys, 

I am in need of some guidance.  My wife and I have a rental property in Arlington, Tx with a remaining mortgage of $52K.  It has been rented below market at $1050/mth on a month to month lease.  3br/2.25ba in that area rents for $1200 to 1450 a month.  

After a recent storm there was a lot of interior damage because of bad roof.  The kitchen cabinetry is trashed.  Carpet needs to be taken out.  Lastly foundation needs to be fixed which is quoted at $7K.  The property after repairs will apprise for $138K easily. The closing fees for the loan is around $7K. Can I get better?

My plan is to evict the tenets and take out $30K of equity to make repairs to the home.  Our mortgage now is $850/mth including taxes and escrow with less than 15yrs remaining.  The new loan will be $897 30yr at 4.5ish% including taxes and escrow.  After repairs are done rent out property at $1200 to 1250 to have very competitive rent and tent retention.  10% of cash flow will go against mortgage to pay off loan faster and 5% toward repairs so that we will not have this issue again.  

Thoughts?

[Kush Gulmatico]

I️ would renovate the property like you plan and increase rent pay mortgage save cash flow for rainy days like this.