They had balance of $8000 but work worth $15k so they quit.

I just don't know if it's worth it because a mortgage would provide me with lower rates.

Bought a rental w/ cash for $50kNow it's worth $125k.Would like to cash out refi 80% of it as interest only to invest it elsewhere.Is this possible?

You would lose a few months of rent but it may be worth it to expedite the refi.

She chose the two-year, and I figure it's worth it to not increase the rent to keep a good tenant and have no vacancy expense/headaches. 

Speculation is about buying something without knowing how much it is worth (i.e. bitcoins) and hopes greater fools come along and buy it from you at a higher cost. 

The risk is worth the reward (at work we call it Operational Risk Management).

If the property is truly worth $36.5k, just sell it, pay off the high interest loan, pay Uncle Sam short term cap gains, and you may even have some cash left over which would be a huge win.

Jay Hinrichs It’s funny because those who bought a 4 plex in Phoenix after the crash now have experienced the rebound.I was late to the game and bought mine in 2014, but I could have bought dozens of them off the MLS for around $150-175k and they are now worth $300-350k.

Hopefully your investments are worth more because of the appreciation in philadelphia.