Skip to content
Buying & Selling Real Estate

User Stats

14
Posts
10
Votes
Tammy Ginsburg
10
Votes |
14
Posts

Advice on scaling

Tammy Ginsburg
Posted Nov 20 2023, 09:57

Hello,

Would love any advice on this!  I got my first multifamily back in January of 2023, which i am currently house hacking. I have some problems now scaling to my next property.  I got myself into some credit card debt during my renovations.  I underestimated them.  I have no money right now for a down payment.  Is it best to pay my credit cards off first and then save for a down payment?  I feel so stuck right now and it’s frustrating.  I really would love to continue my journey but have no idea which direction to go.  Any advice would be greatly appreciated.  Thank you!  

User Stats

3,913
Posts
3,594
Votes
Jaron Walling
Pro Member
  • Rental Property Investor
  • Indianapolis, IN
3,594
Votes |
3,913
Posts
Jaron Walling
Pro Member
  • Rental Property Investor
  • Indianapolis, IN
Replied Nov 20 2023, 11:27

@Tammy Ginsburg  You already know the answer. Slow and down and except it. 

"I underestimated them. I have no money right now" - You need to feel this burn and work your way out of it. You underestimated or hired the expensive contractors. Leveraging again to buy another property teaches you nothing. It would probably pile on more risk. 

Making fast moves without much experience is when investors get caught. Unlike what the TikTok gurus preach you can't leverage continuously to financial freedom. What about a personal emergency fund? What about rental reserves? I'd save for both and pay off the CC debt. 

User Stats

431
Posts
265
Votes
Carini Rochester
  • Investor
  • Rochester, NY
265
Votes |
431
Posts
Carini Rochester
  • Investor
  • Rochester, NY
Replied Nov 20 2023, 12:37

Pay off that credit card! That interest will kill you!

BiggerPockets logo
BiggerPockets
|
Sponsored
Find an investor-friendly agent in your market TODAY Get matched with our network of trusted, local, investor friendly agents in under 2 minutes

User Stats

11
Posts
1
Votes
Sharon Porter
Pro Member
1
Votes |
11
Posts
Sharon Porter
Pro Member
Replied Nov 20 2023, 15:47

I have done the same thing but I spoke with my credit card company to lower the payment and they gave me a 2.5% rate and put it up for 60 months. So when I have the money. I can always paid it off. So it free up some of my money on the 2 family that I have. My credit card payment was cut in half. So you can try to do the same to see if that will work for you.

User Stats

456
Posts
289
Votes
Christian Ehlers
  • Real Estate Agent
  • NH & MA
289
Votes |
456
Posts
Christian Ehlers
  • Real Estate Agent
  • NH & MA
Replied Nov 26 2023, 14:04

Definitely take care of the credit card debt before anything else! I can only imagine the rate is high on that and it will only make it more difficult to scale, especially in this market where cashflow is very hard to find. Play Defense for now and wait for the right opportunity and the right time for you.

Christian Ehlers Realtor Logo

User Stats

3,148
Posts
3,005
Votes
Henry Clark
Pro Member
#1 Commercial Real Estate Investing Contributor
  • Developer
3,005
Votes |
3,148
Posts
Henry Clark
Pro Member
#1 Commercial Real Estate Investing Contributor
  • Developer
Replied Nov 26 2023, 18:50

As noted step back and use this as a learning moment.

1.  Renovations planned versus actual.   What is the big miss?    
2.   Make a list of your future capex and planned spend by year.   Do you have a separate bank account to isolate these funds?  Did you build that into your deal analysis?  Are you setting aside for property tax, insurance or vacancies?

3.  House hack.  Did you do your room?

4.  Did you fold the renovations into a loan or cash flow?  How big dollars?

5.  Which renovations did you do personally?

6.  By team member what is your relationship?

7.   What can you valueadd on the MF or by room?

No response needed but revisit all of the above.  

Scaling.   Sit down and write out your scaling plan.   What adjustments do you need to make?  Cash flow, appreciation, risk reward, timetable.

User Stats

13
Posts
3
Votes
Margo Sultenfuss
Pro Member
  • New to Real Estate
  • Boston, Ma
3
Votes |
13
Posts
Margo Sultenfuss
Pro Member
  • New to Real Estate
  • Boston, Ma
Replied Nov 27 2023, 11:45

Hey Tammy - I'm in a similar boat and it's so frustrating. Knowing you want to keep the ball rolling and gaining traction but being stuck is hard to get past, but I think what everyone said above is the best route. Looking at it big picture, it's certainly not a bad time to lay low for a bit and tackle renovation debt before hopping in to the next venture. As much as I want to jump into something new, there will 1000% be unforeseen costs again and I want to be in a place to be able to handle those when they come.

User Stats

626
Posts
1,223
Votes
Travis Timmons
  • Rental Property Investor
  • Houston, TX
1,223
Votes |
626
Posts
Travis Timmons
  • Rental Property Investor
  • Houston, TX
Replied Nov 27 2023, 12:06

Slow and steady still wins the race. Pay off that credit card debt, be patient, and realistic.

The way you win the game is to stay in the game. Time + owning assets is what builds wealth. Allow yourself to keep what you have and to let time take over. While you're doing that, live off of nothing and maximize your income. 

And realize that going from 0 to 1 property and 1 to 2 properties will move at a snail's pace in Boston. Don't get the door disease and feel left out because you only own 1 property. 10-15 years from now, 2-3 multifamily properties in Boston will obliterate a pile of doors/cheap properties in a rust belt or low cost market.

User Stats

2,187
Posts
1,622
Votes
Lien Vuong
  • Real Estate Agent
  • Boston, MA
1,622
Votes |
2,187
Posts
Lien Vuong
  • Real Estate Agent
  • Boston, MA
Replied Nov 29 2023, 12:56

Pay off the high interest loan and work on saving more funds for your next home. Once your debt goes down you can get an equity line of our the home and use some of those funds to scale. 

The Elle Group Logo

User Stats

220
Posts
187
Votes
Daniel McDonald#5 House Hacking Contributor
  • Real Estate Agent
  • Beverly, MA
187
Votes |
220
Posts
Daniel McDonald#5 House Hacking Contributor
  • Real Estate Agent
  • Beverly, MA
Replied Nov 30 2023, 05:09

Sounds like the EXACT boat I was in on my first house hack. Worked hard to save, then racked up some debt, then had to pull myself out of it before I could get into the second one. Be patient. BP can be very misleading and frustrating because a lot of people aren't dealing with such an expensive market so that whole house hack every year rule is much easier. 

User Stats

13
Posts
13
Votes
Denis Vaughan
Pro Member
  • Boston
13
Votes |
13
Posts
Denis Vaughan
Pro Member
  • Boston
Replied Dec 4 2023, 19:17

@Daniel McDonald 100% correct. Expensive market. It may be a house hack every 2-3 years instead of every year but thats ok. It will snowball eventually. Build a solid foundation!

User Stats

29
Posts
21
Votes
Zachary Gray
  • Rental Property Investor
  • Framingham, MA
21
Votes |
29
Posts
Zachary Gray
  • Rental Property Investor
  • Framingham, MA
Replied Jan 7 2024, 13:07

Hi Tammy

I had the same issue and managed to scale from 1-130+ units in two years. I’d love to help message me 774-258-1419

User Stats

2
Posts
0
Votes
Abner Mathurin
Pro Member
  • Fayetteville, NC
0
Votes |
2
Posts
Abner Mathurin
Pro Member
  • Fayetteville, NC
Replied Jan 12 2024, 20:21

Hey

@Tammy Ginsburg 

 Bravo! You're on your way to financial. It looks like you need to make some extra cash to pay those CC debts while you're building your portfolio (slowly). Have you ever considered RE wholesaling? It is something you may be able to do part time of full time depending on your schedule. You don't need to money or credit, just determination and hard work. You basically get paid to fine deals for Real estate Investors in your market. If this sounds interesting, please feel free to message me. I can share some valuable information.