How Much Equity to Pull Out

[Vincent Pelletier]

Hello BP!

I just got the final appraisal done on my first real estate deal. I bought a SFH with unfinished basement, Suited the basement and rented it out. Upgraded services on the property.

I will break it down quick then ask some questions. Looking for some advice. 

Bought SFH for $360,000

Down payment of 72,000(%20)

16,000 of down payment was from my Line of Credit

I put $42,000 (+/-$300) in renovations and made a seperate basement suite in the house

Rented out the basement for $1500/month on a signed lease

Rented out one Bedroom upstairs(where I live as well) for $500 month-month.

Planning on renting entire upstairs out once I purchase my next property. Will get approx. $1900-2200 for the upstairs 

My after repair appraisal came in today @463,000

My Current mortgage is for 280,000

The bank approved me to take out %80 of equity with a new mortgage of 370,400

A cash out of 92,600 leaving me with approx. 12,000 of my own money in the property + holding costs up to date(Approx. 10,000)

New mortgage of 1,754/month

Now my question is should I pull out the full 92,600 or should I take less (60,000-70,000?) in order for my P&I to be lower? I do not have another property in site as of now so if I take less out on the Re-mortgage I can pull the rest of my equity out with a HELOC when I find my next property(although that will be a higher interest rate).

This is my first investment and the Appraisal came in higher than I thought it was going to, so I am just wondering if it is wise to pull out as much as I possibly can here or not. What are other people doing in this situation?

I guess what I am really trying to know is what is a safe limit?

Any and all advice is appreciated! Thanks BP!

Vince Pelletier