New guy looking for advice
Hello,
This is my first post on here. I just found this website today and may be putting this in the wrong section. I am excited to have a place to learn, as I haven't really been utilizing research at all. I currently own three rental properties and would love to hear from you all if I am doing anything wrong or any advice you can impart. Until this point, I have only been taking the advice from my realtor and haven't sought out advice of others. I am looking to add at least one property a year, and possibly doing an occasional flip if possible.
Let me start by sharing my current portfolio:
First condo unit I purchased in Midvale, UT for $56,000. I currently rent it out for $860/month with a HOA of $224/month. I put an all cash offer on this one, so I didn't have any closing costs. I have been told by others that it isn't a good idea to do all cash offers, and to leverage my money but I personally kind of like the return and not having to pay any costs.
I decided to purchase two more condos using financing. I bought one in SLC, UT for $73,000 with a monthly HOA of $220. I decided to move into this one and rent out my house. I purchased my house for $199,999, put 10% down. My mortgage is $1100/ month and have a tenant in there with a 2 year contract for $1500/month. I moved into this tiny condo in SLC which was much more of an adjustment then I ever expected. Moving from a four bedroom to a one bedroom with two dogs and a wife has been a challenge! We're currently updating the condo in hopes to rent it out in the future. I am not so sure the return will be that great on this one though.
Our third condo we purchased using a hard money loan. We purchased the condo for $90,000 with the hard money loan paying 1.5% to the investor up front and a 12% monthly interest rate. We re-financed immediately after the appraisal came in at $115,000 and only had to put about $11k down including closing costs and to the investor. We are currently renting that unit out for $950/month with a monthly HOA of $180.
I have no idea if this is how others share information or not, and I am sure that all of that probably seems pretty jumbled. I really enjoy buying and renting out properties. So far, the only rule I have been following is that I have been trying to get over 10% cash on cash return. I don't even know if that is a good rule of thumb, but that is the only one I have been following.
My question's are, do you think I should re-finance and pull all the cash out of my first property to purchase another? Is there better rules of thumb that I should be following other than getting over 10% cash on cash return? Feel free to have me clarify anything from this post as I am sure it is confusing. Please let me know if I am doing anything wrong, I dont mind negative feedback. I am really excited that I have found a group of people to bounce ideas off of and to hear of your successes and advice. So far, the only person I talk to about this is my realtor, and I am not even sure if I should keep using him or try going about alone?