Refincaing house for down payment?

[Keil Stauffer]

Hello,

So my wife and I are looking at moving to a new home in the spring (figuring prices would go down and we also are going to do some work to our home over the winter.) The house currently appraises as $80000 and after forced equity and appreciation, we would like to see it sell around $120000.

We have about $20000 liquid for what was meant to be a down payment on our next home. Instead I was thinking to invest that $20000 in a rental we have found. Then refinance our home with the current rates we have, after we get it reappraised, use that equity as a down payment to buy our new home. Then keep the house as a rental. Since we don’t have to sell it for the equity to get our down payment.

Sorry if that doesn’t make much sense, it seems to work in my head so if there are flaws in my logic here I would appreciate some guidance!

Thanks