How to scale your rental portfolio

Member since 2022 · 17 posts · 22 votes

I recently purchased my first property (turnkey) using a conventional mortgage. After purchasing it, I realized that saving up for the down payment (25%) every year is going to be a really slow way to grow my portfolio but I see many investors buy multiple properties a year. How do you do it? How do you fund the down payment?
I understand that the BRRR method is one-way to cycle money and fund future projects but what are the other methods that people use?

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Nathan GesnerBusiness Member

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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes

Quote from @Ashwin C.:

Some people make more money through their W-2 job.

Some inherit money from family.

Some create revenue through side-jobs or hustles.

People present real estate investing as soooo easy with nooooo money necessary! It's all BS. I saved up $10,000 to buy my first investment. I saved up $20,000 to buy my second investment. I realized I needed to make more money if I wanted to scale, so I figured out a way to make more money with my business and then invested that extra income into real estate. It took a couple years to buy my first three rentals, then I scaled to 33 rentals in three years because I hustled and saved. I also took every dime earned from my investments and re-invested it. I haven't bought anything since November 2021 and am currently in a season of rest and renovation.

There's nothing wrong with listening to what others are doing and trying to find ways to scale but be realistic. Some of those investors inherited money, others are high earners, and some just got lucky with their timing. The majority of wealthy people get there by making wise decisions over a long period of time.

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Shaniqua Knight
Real Estate Broker · Fayetteville NC · Member since 2021 · 55 posts · 26 votes
3y
Quote from @Ashwin C.:

I recently purchased my first property (turnkey) using a conventional mortgage. After purchasing it, I realized that saving up for the down payment (25%) every year is going to be a really slow way to grow my portfolio but I see many investors buy multiple properties a year. How do you do it? How do you fund the down payment?
I understand that the BRRR method is one-way to cycle money and fund future projects but what are the other methods that people use?
As someone else who is starting out I think you have to find what works best for you and realize that your race isn't everyone else's. How you achieve your success is different than how others achieve theirs. House hacking is a good beginning strategy.
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James Hamling
Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
3y
Quote from @Ashwin C.:

I recently purchased my first property (turnkey) using a conventional mortgage. After purchasing it, I realized that saving up for the down payment (25%) every year is going to be a really slow way to grow my portfolio but I see many investors buy multiple properties a year. How do you do it? How do you fund the down payment?
I understand that the BRRR method is one-way to cycle money and fund future projects but what are the other methods that people use?
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Andrew SyriosPro Member
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Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
3y
Raising private money is probably the best way; either private loans on SFR and small multis or syndications on larger properties (apartments, office, etc.)
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Lawrence Potts
Real Estate Agent · Member since 2018 · 459 posts · 414 votes
3y
Quote from @Ashwin C.:

I recently purchased my first property (turnkey) using a conventional mortgage. After purchasing it, I realized that saving up for the down payment (25%) every year is going to be a really slow way to grow my portfolio but I see many investors buy multiple properties a year. How do you do it? How do you fund the down payment?
I understand that the BRRR method is one-way to cycle money and fund future projects but what are the other methods that people use?
There are some products out there that offer lower down payment options. Sometimes you are able to do unconventional financing options as well such as creative financing solutions. You can use private money, hard money, you can leverage your IRA or 401K, borrowing against your equity with a HELOC or Home Equity Loan, you can House Hack, etc., multiple ways to gain properties! Hope that helps!

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Ryan ThomsonBusiness Member
Real Estate Agent · Colorado Springs, CO · Member since 2018 · 1k+ posts · 1k+ votes
3y
I really like scaling with house hacking. One a year for 5% down. If you get started this way, then you have experience to start pursuing private money and partners. I'll send you a video of a talk I gave on how to scale with house hacking.
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Joe VilleneuvePro Member
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
3y
Quote from @Eliott Elias:

Quote from @Devin Scott:

Quote from @Eliott Elias:

Quote from @Devin Scott:

Quote from @Eliott Elias:

Using other peoples money.

Sorry man but seems like all your posts all read like this - short and not helpful. My favorite any time someone asks cash flow or appreciation.... "Get both!" What's the point of posting that? Oh I should buy 10 properties at once for 30% under market with 0 money down that both cash flow and appreciate 10%? Gee thanks.

Real estate is simple. I'm not here to feed into the analysis paralysis and over analyzation most of you have. Use other peoples money, next.

Then don't post. It's condescending as heck. You think people discussing these topics with a bit more depth than 'other people's money' is analysis paralysis? Yikes. And the irony of that being your 8,066th post for something so simple is not lost on me.

I apologize if simplicity is condescending to you. If my posts do not resonate with you, move on.
The fact that he is looking for a complicated answer, tells you all you need to know.
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James Hamling
Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
3y
Quote from @Devin Scott:

Quote from @Eliott Elias:

Quote from @Devin Scott:

Quote from @Eliott Elias:

Using other peoples money.

Sorry man but seems like all your posts all read like this - short and not helpful. My favorite any time someone asks cash flow or appreciation.... "Get both!" What's the point of posting that? Oh I should buy 10 properties at once for 30% under market with 0 money down that both cash flow and appreciate 10%?  Gee thanks.

Real estate is simple. I'm not here to feed into the analysis paralysis and over analyzation most of you have. Use other peoples money, next.

Then don't post. It's condescending as heck. You think people discussing these topics with a bit more depth than 'other people's money' is analysis paralysis? Yikes. And the irony of that being your 8,066th post for something so simple is not lost on me.

Ya know Devin, if you don't like a reply, feeling it's too short, simple, basic, you could do this weird old-fashioned thing called "ASK". "Hey, thanks for that but, I don't totally understand, can you please explain in more detail?".

Or, just freak out, I am sure freaking-out is gaining a whole bunch of understanding and knowledge right?

See, my crystal ball is at the cleaners, so I don't know what you expect unless you ASK QUESTIONS. You asked a question in this posting, the answer is "Other Peoples Money". If you have questions on that, maybe you should ask those questions in follow-up.

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