i will still BRRRR if I can get most of my capital back and break even. 

As pointed out by others, the costs to refi along with the penalty, will take a very long time for you to break even.  

Around year 3 I will start breaking even after rent increases and refi.

I believe the pay system we have is fine,  Lets break it down to someone who make 100K a year.  

How do you break the news?

For supercharged cash flow I like this rule of thumb as my #s seem to flesh out well w/in these margins:1BR under $100K2BR under $200K3BR under $300K4BR under $400KMaybe you can go up a notch on each if you want to break even w/cash flow...so to each his own w/that.Of course if they are being sold furnished / turnkey, I'd add in $5-10K of value (depending on how nicely furnished it is) per bedroom.  

This could boost your cash flow without relying on stock market returns (Which can be volatile)2.Real Estate Professional Status (REPS): If you’re leaving your W2 job, qualifying for REPS can allow you to deduct real estate losses against your ordinary income, giving you a big tax break.3.Cost Segregation: This can accelerate depreciation on your properties, creating significant tax deductions.

@Morgan BrownYou may find better pricing by breaking these up into 2 sales contracts and 2 transactions. 

Here's how I break it down:Analyzing the Current Property:First, consider the equity built up in the current property.

Im not otherwise concerned about it breaking since I have other ways to heat the home. also A/C is only a few years old.