Boston, MA · Member since 2018 · 25 posts · 2 votes
I bought my first real estate multi-family rental property. I want to know how soon I can leverage this property and use its equity to buy another multi-family. What are the strategies I can use to speed up this snow balling effect?
Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
8y
@Account Closed it all depends on how good of a deal your first property was. My first deal was a four unit in Lyons, IL which I purchased for $195,000. I was able to cash out refinance six months later at a new value of $260,000! This allowed me to cash out a large chunk of my investment, but I also bought a deal at 75% of market value!
If you buy a deal at or right under market value, you will not be able to (nor should you want to) leverage the investment further. Instead, you have to wait a few years to return your capital through the cash flow.
Have you looked into using a HELOC on your personal residence or a 401k loan in order to invest further? These are common strategies to get more cash together to invest in real estate.
Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
8y
@Account Closed it all depends on how good of a deal your first property was. My first deal was a four unit in Lyons, IL which I purchased for $195,000. I was able to cash out refinance six months later at a new value of $260,000! This allowed me to cash out a large chunk of my investment, but I also bought a deal at 75% of market value!
If you buy a deal at or right under market value, you will not be able to (nor should you want to) leverage the investment further. Instead, you have to wait a few years to return your capital through the cash flow.
Have you looked into using a HELOC on your personal residence or a 401k loan in order to invest further? These are common strategies to get more cash together to invest in real estate.
Investor · Columbus, GA · Member since 2014 · 2k+ posts · 1k+ votes
8y
Most lenders will want you to wait 6 months. There are always exceptions, such as you added a lot of value to your property, rented it up, or went from unstable to stabilized very quickly.
-It's currently worth $460K without improving the property
-3 units
I have own this property for 3 months so far. I want to buy another one as soon as possible. It was my first investment property, which is why I wanted to ease into the BRRR strategy. My next move is to try to move into an owner occupied 3-unit property.
Investor · Columbus, GA · Member since 2014 · 2k+ posts · 1k+ votes
8y
The purpose of refinance, in the BRRRR strategy, is to use the equityto purchase another property. You don't have any equity, so it is too early. Save up some cash.
Investor · Columbus, GA · Member since 2014 · 2k+ posts · 1k+ votes
8y
The purpose of refinance, in the BRRRR strategy, is to use the equityto purchase another property. You don't have any equity, so it is too early. Save up some cash.
Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
8y
It really just depends. If you can BRRRR out of the first property, then (at least with some banks) you can refinance as soon as it's rehabbed, rented and stabilized. You just need to start talking to banks to see if they are willing to refinance out your equity investment.
Boston, MA · Member since 2018 · 25 posts · 2 votes
8y
@Anthony Dooley@Andrew Syrios@Michael Ablan@John Warren thank you very much for the help. This does sound disappointing. I need to look at ways to get the next property as soon as possible. I already use refi and half of my 401k to acquire my last investment property. I need to go back to the drawing board to figure out where I can generate a minimum down payment for an owner-occupy property.
Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
8y
Originally posted by @Account Closed:
@Anthony Dooley@Andrew Syrios@Michael Ablan@John Warren thank you very much for the help. This does sound disappointing. I need to look at ways to get the next property as soon as possible. I already use refi and half of my 401k to acquire my last investment property. I need to go back to the drawing board to figure out where I can generate a minimum down payment for an owner-occupy property.
I would recommend looking for possible private lenders as the next step to being able to purchase more.
Boston, MA · Member since 2018 · 25 posts · 2 votes
8y
Okay, I invested 112k into the property and it has since appreciated from the purchase price of 455k to 480k. So why can't I get a HELOC? It's the market value minus how much I owe doesn't it?