Appraisal came in way higher than expected...what to do?

[Mike Trzaska]

Hi All,

I just got my appraisal back on my latest BRRRR and it came in wayyyy higher than expected....I know, good problem to have. Now I am faced with a decision, do I sacrifice cash flow and increase my risk exposure to take out the most tax-free refi proceeds or do I balance cash flow with refi proceeds to manage the risk? Looking to this great community to see how they would approach.

Here are some more details:

All in Purchase + Rehab + Holding = $64k

Appraised Value = $128k

Amount available for cash out = $96k

Monthly Rent = $1150

Monthly Cashflow after all expenses at $96k Cash Out = $48/Mo

I personally don't think the house would sell for $128k, I would think it would sell between $105 and $110k. The neighborhood is stable, but not in the path of progress. My goal is to build passive income, but since I am early in my journey and self-funding my deals I want to keep as much capital as possible. My thought was to take out 75% of what I think it would sell for in order to manage the risk. I do have property management in place, so could self manage if thing went awry to reduce my monthly expenses. Any insight into how others have approach this scenario (albeit a great one) are appreciated!!