Principal balance currently at 314kProperty Details: It's essentially a "2-in-1" property, with the main unit rented out for $1,900/month and an attached ADU bringing in an additional $1,200/month.

What you have calculated is not cash on cash return.   

Principal balance currently at 314kProperty Details: It's essentially a "2-in-1" property, with the main unit rented out for $1,900/month and an attached ADU bringing in an additional $1,200/month.

Now I know what you all are thinking -- that place is not going to cash flow!

It is typically lower than cash-on-cash and you can put it somewhere around 6% conservatively.

The third property has a nice cash flow.I am wondering if there are steps I can take to reduce the cashflow issues of the 2 properties before obtaining another property, like pay down the mortgages or should I just save the cashflow from the third property to pay for any future expenses?

Congrats on your cash-flowing property in Chicago! 

“ cash flow returns” almost always compare horribly to a simple bank CD after you deduct for insurance, prop taxes< vacancy, capex, prop management (or your personal time.) etc etc etc. 

So if you are anticipating higher rents and therefore higher income next year you may want to wait till then if you are trying to maximize the amount of the cash out refi.

Its being operated at STR from last 30 months with great cash flow.