How to buy after initial refinance?

[Paul M.]

Let me try this again..

Started out with 150k cash in July, purchased a fully occupied 5 unit worth 120k for 100k. It has a 6th unit that needed to be redone from the ground up. We’re about 12k into the remodel and it’s about 75% complete, should be finished by the 1st and cost 20-25k total. I also entered into a land contract in August for an additional 3 duplexes for $90k. I put $9k down and the remaining amount in the business account while roughly $3600 is withdrawn monthly for 24 months at 6% interest. In January it will have been 6 months since the starting of collecting rents and 5 months into the land contract payments. I pay my property manager $75 per unit a month which totals $825 ($900 when the 6th unit is rent ready.)

Revenue – land contract payment + management fee + insurance + expenses (not including property taxes) at the conclusion of the first six months here will have a yield of 18-20k in profit total. I should still have about a 10k-15k cushion in the bank come January after the duplex payments thus far and remodel costs.

I plan on doing a cash out refinance on the 6 unit I own 100% equity in as soon as the remodel is complete and I can get my building appraised. It should appreciate to 150k with the added unit. There are a handful of other fully occupied 6-plexes ranging from 90k to 200k around here that I’m interested in at the moment.

Here’s my question to the investment experts here:

Moving forward.. should I buy 1-2 properties a year and slowly build equity with straight cash from the original refinance and do consecutive refinances every 6 months or so? Or should I put money down on a handful of different mortgages immediately? What investment strategy would you employ and how easy is the latter to accomplish with a lender?

Thanks, this place is great btw! Such a good resource.