Cash-Out Refi Question and Need Some Help

[Spencer Tanaka]

Hi Everyone,

My wife and I bought a duplex and started a renovation in early 2022. At that time we had a 3.8% interest rate and our intention was to BRRR the property once completed - well, right as the remodel was finishing up rates started to go up. I have not done a cash-out refi yet, but we've got about $40K in equity sitting in this home. My quote to do a cash-out refi is to move our interest rate to a 7.6%… double what we bought the home for and our mortgage+escrow goes up about $550/month.

How do you look at whether the money now is worth more to you than taking the hit on cash flow? I’m stuck on sitting and waiting for rates to go down vs. taking the cash flow hit, but now I’ve got $40K to roll into another property.

Would appreciate any advice or thoughts if you’ve been through this!

[Spencer Tanaka]

@AJ Satcher that has definitely been another thought! We're seeing good success with this property as an STR. About 18% COC return and the area is being highly developed around it.. so current plan is to hold since we're cash flowing. Pulling the equity out would hurt the cash flow though since my mortgage would go up significantly.

We bought in late 2021 so we do not have any obstructions to refinancing. Seasoning period is a year now though I believe instead of 6 months.