Cash Out Refi or wait

[Vince Nguyen]

Hello everyone, First time post here. I wanted to see if it made sense to do a cash-out refi to use the cash to purchase a rental property and purhaps using the BRRRR method. My current rate is 3.85 and now my lender is saying it's at 6.5% as of today. I would be able to cash out 200K to be able to put into my next project or a few using that for down payments. But my current mortgage that I'm doing the cash out refi will be double of what I'm paying now. I'm paying around 1200/ month and it's been around 10 yrs in. My new mortgage will be 2475 and I'm getting rent now at 2725. I will also have to pay for some expenses like water and trash so it won't leave me much room for cash flow as I would now on that property. But it will also allow me to purchase more properties with the cash out. I can also wait for it to lower but then I'm afraid it might not for a long time and I will me missing out on some properties. Thanks in advance.

[Kevin Sobilo]

@Vince Nguyen, sounds like your cash-flow will be negative after you factor capex, maintenance, vacancy, etc.

Could you keep the current loan and just take a 2nd mortgage or heloc for the additional money. this way your existing low interest loan stays in place. That might lessen your monthly payments and help you get some cash together for more deals.

Another option would be to sell and 1031 exchange into a larger property or multiple properties.