Cash Out Refi? Cash flowing rental with a conventional mortgage

[Ariel Nelson]

Hi all, 

I am just starting out with real estate investing and looking for some insight.

Last year I purchased my first investment SFH in a desirable class A neighborhood for 260k with a conventional mortgage at 3.125%, 52k down out of my personal savings. The house appraised at purchase for 300k and I put 30k into it for new kitchen, new floors, new roof and updated electric. ARV is now 350k. The current monthly mortgage payment including P&I is $1435. It is renting is at $2900/month.

I am trying to decide if I should cash out refi to help fund the next deal or if it would be best to leave this property as it is cash flowing very well given current interest rates. To cash out with a .75 LTV and new 6% interest rate, monthly mortgage goes up significantly and my cash flow significantly decreases to a few hundred dollars. After closing costs I will get around 44k to put into the next deal. It is feasible for me to save this amount over the next year or so on my own or do a HELOC in my primary residence to fund the next rental.

Right now I am looking to do 1-2 properties per year and not looking to ramp up really significantly in the short term.