I have one rental, what should I do next??

[David Honeycutt]

What’s up BP, I currently have one rental property that cash flows around $240 a month, the tenants are great and have already asked to renew the lease when it is up. I bought the house in 2014 and have about 90k in equity. Im ready to expand. So my question is what should I do next? I met with a local bank last week to see about doing a cash out refi. The bank said we could do 80% LTV, I would then use the funds to pay off some personal debt (credit card/ car note) which is around $400 in payments a month and then have 25-30k left over to put as down payment on another SF rental. My only concern is that, I would barely be breaking even on my current rental and my rate would go from 3.75% to above 5% The other idea I had was to sell current rental and 1031 into a multi family. It would most likely have to be out of state. Any advise on what I should do or what you would do is greatly appreciated. My ultimate goal is to retire from my 9-5 asap! Thank you, David

[Joe Villeneuve]

You realize that if you use your loan money from the refi to pay off a credit card and car, all you're doing is exchanging two debt payments for one...and making no progress.

You don't use loan money to pay off loans, you use profit and/or cash flow to pay them off.

You use loan money to invest with...and to use the money (profit and/or CF) from that investment to pay off the personal debt.