Needing some Mustachian advice on my situation regarding a cash-out refinance.
-I own a rental home in Denver that cash flows well. It was my former primary residence, but 4 years ago it became a rental. Rents have steadily increased YOY.
-Even though it is discouraged by some, I have been putting additional principal into the mortgage in order for it to become a "college fund/soft FIRE plan" in 14 years.
-A friend of mine who owns several rentals in the area told me to consider doing a cash-out refinance in order to have the down payment cash to purchase 1-2 more properties. "Why control $300,000 worth of real estate when you can control $600,000. A cash-out refinance can allow you to do that." He makes a strong point.
-I have always been interested in purchasing a second rental property, but have been saving in order to do that. However, a cash-out refi would allow me to do that on a much faster timeline, but would start me at a new 30-year mortgage.
-Current stats on the property: 4.6%, 21 years remaining on the loan.
My question to the community is should I pursue this cash-out refi (I was quoted a 3.875% rate today), should I stay put or should I consider an alternative approach altogether?