Long Term Buy & Hold Portfolio Strategies

[Mike Van Arsdale]

Hello all - I've been a long term reader of the Bigger Pockets forums but never posted.  

I'm writing today to see if anyone in the space has any alternate ideas for how I could be treating my portfolio.  

Current Portfolio:

1. Single Family Home (East End Louisville)

- Originally my primary residence ($209k)

- Property is in our personal names (not in LLC)

- Comps in the neighborhood are $285k

- Built in 2002

- In well established  neighborhood w/ middle income families

- On 15 year 2.99% mortgage w/ 8 years remaining and $115k principal balance

- Currently rents for $2,185 month/$26,200 annually

- NOI $16,320

- Cashflow $4,500/annually 

- $12k principal pay-down annual (current year)

- Currently getting less than 3% return on our equity

Original goal was to not cash flow but pay off property, allow appreciation, sell property at end of loan and use capital for additional projects.  Our current tenant is moving out at the end of this month (Oct 2018), we have interested tenants to fill the vacancy early in November, but are considering putting on the market to sell, 1031 into new projects.

2.  Single Family Home (Shelby Park)

- Purchased for $48,500 in February

- Property is in an LLC

- Renovated for $13,500

- Rented May 2018 for $850/month

- 30 year loan w/ 20% down @ 5%

- NOI $7,400 annually

- Cashflow $5k/annually

- Getting roughly 20% cash-on-cash return

3. Single Family Home (Shelby Park)

- Purchased for $21,500 in April (cash)

- Property is in an LLC (same one as above)

- 100% renovation for $70k (cash)

- Rented October 2018 for $1,145/month

- No current mortgage 

- NOI $12,500 annually

- Cashflow $12,500/annually

- Getting roughly 13.5% cash-on-cash return

Looking at getting a 30 year mortgage at 5.65%, pulling out 80% of the value (today comps are in the $130k to $165k range) to use for purchase of new projects.  

Goal:  Build a larger portfolio of better-than-average properties for their respective areas over the next 5-10 years, reinvesting as much if not all funding into the portfolio to grow to a point that it can replace our income.  

Questions for the group:

1. What would you do with the first house with regard to selling/re-renting/refinancing?

2. What suggestions do you have on whether to get a mortgage on the third house or keep as is?

Thanks everyone!  Looking forward to discussing.