Cash out Refi question - need your input!

[Steve S.]

One of My rentals I acquired for $100,000. I put $25,000 down and have been laying on a 30 year noTe For several years

Interest rate - 3.75%

Remaining balance $70,000

Property value is $200,000

Assuming I could get an 80/20 loan, that should be a mortgage of about &160,000 putting roughly $90,000 in my pocket

I have anothe investment I believe will generate 10% returns. 

1) what interest rate do you think I could donthis at?

2) is my general Math above correct?

3) why would this be a bad idea?

[Randy Rodenhouse]

I concur with @Bob Green about the rates since I have similar experience. I think the equity you have in your property is dead money and you should put it to work as long as your rate of return is at least double that of your underlying loan. In this case your underlying loan will be around 5% and your rate of return on your new investment will be 10%.