Cash Out Vs Rate Term Refinance

[Satya Y.]

Hi Everyone,

I'm currently in dilemma  whether to do a cash-out refinance or a term loan refinance to close on a construction loan  . Here are the details:

• My current construction loan  balance is $587K
• The property value is $1.15 M
• Property Type : 4Plex
• I have excellent credit and can qualify for favorable rates.
• Approx. Interest rates & Cash Out details
• Case 1:  70% LVT @ 6.875% => -$986 (negative) monthly cash flow  with 200K cash in hand for future investments
• Case 2:  60%LVT  @ 6.75 % =>  -$166 (negative) monthly cash flow  with 100K cash in hand for future investments
• Case 3: Term loan @6.5%  => $605 monthly cash flow. No money for other investments
  

I can immediately deploy the cash  ( if I went with case 1 and 2) to pay off other construction loan debt @9.25% floating rate. In net I can save money with Cash out Refi.

However considering the high probability of Recession and other head winds, is it better to play safe and just stick to Case 3 with Positive Cash flows.  
Or be a little aggressive and pull the cash and make better use of the equity for next property.

I know it's totally depend on the risk profile , but I would appreciate your ideas and suggestions. 

Thank you!

-S