Cash out refi on rental

[Jake Adams]

I purchased a home in 2011 as primary residence 15yr 3.5%. I have since converted it to a rental. I was thinking about a cash out refinance in order to purchase more properties. The loan balance is $80k, current appraisal around $240k, $200 month cash flow, currently gaining about $800 month equity.

Would it make since refi and increase debt on this property even though it is gaining so much equity based off of loan amount?

[Jerry Padilla]

@Jake Adams

Now being an investment property and doing a cash out, the rate is going to be higher than your current rate. 

With a $240k value, you can pull out up to $180k on the property with an LTV of 75%. This would allow you to pull out a little less than $100k minus closing costs and your current $80k Mortgage. If you can purchase a couple investment properties with this cash, and offset the difference in the mortgage payments - allowing yourself to come out ahead and overall increase your cash flow I think it would be worth it.