Cash-Out Refi a Commercial Property?

[Jon D.]

I own a single tenant commercial property that I bought 15 years ago is now owned free-and-clear. It is in a hot area and has since appreciated 5-6X since I bought it. CAP rates in my area are fairly low (4%) so it is not spitting off the cashflow I could get if I pulled some equity out and reinvested. This is what I am considering.

At this stage in my life, I am debt free but am thinking of picking up debt as I have too much net-worth in one spot and I am not using any leverage. My local bank offered me a cash-out refi at 4.9% on a 7 year ballon/30 year amortization. I am considering taking this and using the funds as down for one or two multi-families or do some note investing and arbitrage the difference between the bank rate and the note yield. I would be taking out approx 30% of the equity so would not be over leveraging.  First, any thoughts or suggestions so far?

Also, I think rates are still very low so if I am going to do a cash-out refi at some point, now might be the right time (lest year would have been better).Thoughts?

Lastly,  I would not want to have pressure to reinvest until I find the right opportunity but will have those lofty monthly bank payments.  Are there any safe, short term places to park a nice sum of money in todays market that can come close to or exceed providing 4.9% return? My assumption is no, but I want to test that idea with y’all.