Cash out options? Who should I refinance with? HELP

[Erick Castro]

Hello all. I’m relatively new to real estate investing.. I’m in the process of refinancing a house to get some cash out. I’m confused about who I should refinance with. Should I do it through a commercial bank where they do a 3 year loan with variable interest (this is who I currently have the loanwith)? Should I find a local bank and do a 30 year fixed rate? Or should I be looking for another option? Below is what my numbers are looking like and I spoke to one local mortgage company and provided below some numbers that they gave me. Appreciate the help.

Owed: $52,000
ARV: $130,000
Monthly Rent: $850 (could get more but I’m renting to brother in law. He handles maintenance and takes good care of the property) 
Current Interest rate: 4.5% but will be changing to Prime plus .5 in 2 months. I’m almost at 3 years of ownership.

Local Mortgage Company Offer:
75% of ARV (but I want to do less so that it cash flows better)

$30,000 cash out is what I’m looking at (have some other real estate investments that I’m working on)
$5000 estimated closing costs
$2500 (paying points to get interest at 7.5% is what they told me… kind of confused on how this works)
30 year loan with fixed rate of 7.5% is what I’ll end up with. 

At these numbers my loan would be around $89,000. My loan payment including taxes and insurance would be about $760. Cash flow would be around $100. Not the greatest but I’ll make it work.

My future plan is to refinance when (or should I say IF) interest rates go down to 5.5 - 6% (or lower) so that it cash flows better. I just need the cash out now so that I can jump into a project that I’m looking into.