How much should I pay down my mortgage before refinancing?

[Joel Harris]

I am considering purchasing a 4 plex for $199k. The property cashflows $375 monthly, if it is fully rented out, and rents are slightly below market. 

I can get this property with almost no money down because I have a VA loan, and I plan to live in one of the units.

After examining the investment, the numbers look good regarding cash on cash return, but once I build equity in the property I'm not sure when to pull out cash. 

If I were to pay cash for the property, it would cashflow around 1% of the value of the property, despite the fact that the cash on cash returns are acceptable. 

If you were me, when does it make sense to refinance, or sell and use the capital to purchase a property with stronger cashflow? Alternatively, would you continue to hold, and eventually take out a HELOC as a downpayment for another property, essentially gaining two cashflowing properties for an initial investment of only a few thousand dollars?

Thank you for opinions, advice, and other comments. 

Joel