Growing Portfolio???

5 Replies

Hello Bp Family,

 I own a rental property free and clear. My question is should i do a cash out on this free and clear property to purchase another property and do the same thing over and over with cash out's. Or should i just wait and save the 20% to buy investment properties everytime to grow my portfolio. Which is the smartest and best way to grow my portfolio and buy properties?Thanks in advance.

You can do both :) There is no one way that is the "smartest" or "best" though. It all depends on your risk tolerance and how quickly you want to move.

You can leverage your current property to pick up more rentals. Hopefully the properties will all cash flow ON TOP of your new debt. Couple this cash flow with your other personal savings and every time you're ready to bite on a new purchase, you can. 

Don't forget about saving ample amounts of reserves to cover your growing portfolio should anything unexpected happen.

Great position to be in.  The conservative answer is to save the cash flow from the paid off rental and add in a little to amount to 20% for a down payment for another property.  However, by using BP resources ie podcasts, articles you could look at other strategies using equity and perhaps a lower down payment.

@Carlos Alvarado  

I'm in the belief that cashing out your house and applying that cash toward - for example - 20% down on 10 more houses that are rented with positive cashflow is by far a smarter financial move than continuing to hold one property and gain income.  In the end, it's faster than waiting to save 20%.  This is all assuming all 10 houses turn out well.

Great advice. Thanks everyone. They say you can only do 10 loans on ivestment properties or as long as you have reserves. How many cash outs can you do? 

I would try to us a private or portfolio lender to quicken your growth, @Carlos Alvarado   , (I may be wrong... but) I'm pretty sure private/ community banks that lend out of their own pocket will mortgage you up as many times as they want. Getting you around the 10 loan problem. These same places will likely be able to refi you out as many times as they see fit as well.

We haven't done a deal yet, but I was able to find one of these lenders simply by asking my dad who he banks with. My dad is from a time when there were more private banks, and strong relationship was the name of the game. You actually had to go into the branch office, in a suit to get things done. You knew your banker's wife and children because you treated them all to dinner after your last deal closed, and maybe you even go to the bank's holiday party to keep up appearances/ LOL. For all the conveniences that the internet age has given us, don't neglect relationship building and face time.

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