Right, I had the numbers wrong. You are currently pulling ~$250 from savings or another income source to pay the note. Obviously if you weren't making ends meet and the $250 was coming out of savings then you are correct the money pool does not increase. For your entire monthly cash flow (not just the "investment house") if you lower your expenses $300 per month, you suddenly increase your available cash by $300, even though you are only making ~$30-50 per month on the investment.
For your total income/expense sheet it looks like this:
$3k<monthly income>-$2500<monthly expenses>= $500 <total monthly profit>.

If you lower your expenses by $300 then the equation becomes:
$3k<monthly income>-$2200<monthly expenses>=$800 <total monthly profit>

For the house it works out as:
$1500<monthly mortgage>-1250<monthly rent>=-$250<monthly loss>

After refinance:
$1200<monthly mortgage>-$1250<monthly rent>=$50<monthly profit>

Does my previous statement make more sense now?

 

Galaxy, it makes sense to me based on what you're trying to do. It's not going to save you any money in the long run, but it could ease the bleeding, if you need that $250 for living expenses. If it were your residence it may take on a different analysis. General rule of thumb is a 2% decrease in rate to justify all the re-fi costs. Just make sure you have enough equity in the home so you don't have to incur mortgage insurance premiums. If you need mortgage insurance in order to refinance, I wouldn't do it.