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Cash out refi or keep equity in property?

So my parents recently a paid off a mortgage completely on an investment property (~$800k)

The idea now is to do a cash out refinance so they can use that money for other investments (index funds or more property). They don’t have a retirement or savings — which worries me... and if the housing market crashes, the market value of the property will most likely go down. Which is why I suggested for a cash out refinance.

With the new mortgage, they have been approved to be able to tap up to $500/600k of the equity for ~3%, closing costs probably about 1%

I guess the question is how much would be ideal to take out in equity to put into another venture (like index funds), would it make sense to even do a cash out refi or completely keep the equity in the property and have it cash flow (then use that for investments... but that would also mean not having the funds immediately available)

submitted by /u/Savorymoney
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source https://www.reddit.com/r/RealEstate/comments/iikmc3/cash_out_refi_or_keep_equity_in_property/
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