My wife and I own and live in a 3-unit house, purchased in 2015 for $400k with conventional financing and 20% down. Last year, we took out a HELOC on this property and used that (plus some cash of our own) to purchase a 6-unit for $875k with commercial financing and 25% down. We now own 9-units including the one we live in, and both properties cash flow.
We'd like to keep going and acquire more units. What would your strategy be if you were in our position? Not interested in anything too risky as I feel we've set ourselves up well for the longterm. Our personal cash is basically tapped from the last purchase. Do we now play the waiting game and let the combination of equity growth and likely appreciation do their thing until we're in a position to borrow again? Or are there other options on the table in the nearer term?
Thanks in advance for the suggestions. We're in the Portland, ME market FYI.
It all starts with finding more deals. Once you have a deal you can play around with financing strategies. For example if you find a motivated seller you can joint venture with a person to bring in the money and split the proceeds. You can look to see if the seller is willing to carry the note (seller financing) or you can always wholesale it to make a quick buck. It all starts with finding a deal that makes sense and marketing it to people looking for that deal.
@Paul Baghis , unless you attained additional equity without paying for it, then there's no real magic to getting Lenders to give you 100% Loan-to-purchase. ie. Not gonna happen.
Congrats on your progress to date. If you're familiar with the "BRRRR strategy", you know what I mean by (instant) "additional equity". [If you're not familiar, look it up on the BP search engine].
Yes, everyone wants to "Refinance". But, were/are every one of your "deals" good enough? Or is it: back to the drawing board? Welcome to BP. All the best...