How Do You Scale From Small Deals to 8–50 Unit Complexes Without Using Your Own Capit

Question

Hey everyone,

I'm Eduardo, a 26-year-old investor based in Europe, currently acquiring small rental properties in the U.S. using an LLC and a U.S. citizen partner. So far, I've been buying small 1–4 unit rentals (mostly owner-financed) and renting them through the Section 8 program to generate reliable monthly cash flow.

Now I’m looking to scale up fast into multifamily — specifically 8–50 unit properties — and eventually even larger complexes by the time I’m 30. My goal is to create $50K/month in passive income through scalable, cash-flowing real estate.

💡 Here’s the bottleneck I’m facing:

To move up into these larger properties, I need capital for down payments and renovation budgets — but I don’t want to use high-friction or high-cost options like:

• Working capital lenders:
I’ve been quoted origination fees of $14K to borrow $100K, and then forced into principal + interest payback over 7 years, which often kills the cash flow on value-add deals early on.
• Credit card 0% interest advances:
I’ve seen strategies where people pull $20K–$30K using 0% cards, but you need great credit, income, and that only goes so far. It’s more of a workaround than a long-term solution.

Working capital lenders:
I’ve been quoted origination fees of $14K to borrow $100K, and then forced into principal + interest payback over 7 years, which often kills the cash flow on value-add deals early on.

Credit card 0% interest advances:
I’ve seen strategies where people pull $20K–$30K using 0% cards, but you need great credit, income, and that only goes so far. It’s more of a workaround than a long-term solution.

✅ What I do want to do:

Use an equity-based structure like this:

• I find a value-add 8–24 unit multifamily for, say, $500K–$1M.
• I bring in a private investor (or group) to cover $100K–$300K for:


Down payment


Light renovations


Closing costs
• Down payment
• Light renovations
• Closing costs
• In exchange, they receive:


Equity share (maybe 60–70% depending on the deal)


Preferred return (8–10% annual)


Cash flow during stabilization
• Equity share (maybe 60–70% depending on the deal)
• Preferred return (8–10% annual)
• Cash flow during stabilization
• After 12–24 months of:


Raising rents


Improving NOI


Stabilizing occupancy
… I refinance the property with a DSCR loan, pay them back their capital + return, and keep the long-term cash flow.
• Raising rents
• Improving NOI
• Stabilizing occupancy
… I refinance the property with a DSCR loan, pay them back their capital + return, and keep the long-term cash flow.

I find a value-add 8–24 unit multifamily for, say, $500K–$1M.

I bring in a private investor (or group) to cover $100K–$300K for:

• Down payment
• Light renovations
• Closing costs

Down payment

Light renovations

Closing costs

In exchange, they receive:

• Equity share (maybe 60–70% depending on the deal)
• Preferred return (8–10% annual)
• Cash flow during stabilization

Equity share (maybe 60–70% depending on the deal)

Preferred return (8–10% annual)

Cash flow during stabilization

After 12–24 months of:

• Raising rents
• Improving NOI
• Stabilizing occupancy
… I refinance the property with a DSCR loan, pay them back their capital + return, and keep the long-term cash flow.

Raising rents

Improving NOI

Stabilizing occupancy
… I refinance the property with a DSCR loan, pay them back their capital + return, and keep the long-term cash flow.

🏢 Example Deal (Multifamily 8–Unit):

• Purchase Price: $500K
• Investor funds: $100K (20% down)
• You stabilize NOI and refinance at $650K
• New DSCR loan gives you 75% LTV → $487K
• You return investor’s $100K + return
• You keep the asset and long-term equity

Purchase Price: $500K

Investor funds: $100K (20% down)

You stabilize NOI and refinance at $650K

New DSCR loan gives you 75% LTV → $487K

You return investor’s $100K + return

You keep the asset and long-term equity

Same structure could apply to a 40–60 unit complex, where I raise $400K–$600K across multiple investors, using a syndication-style structure.

🤔 My Questions for the Community:

• Do you see this equity + refinance strategy commonly used in small-to-mid size multifamily (8–30 units)?
• Why do some investors avoid DSCR loans or bank funding even when the property qualifies? (Is it credit, paperwork, or time?)
• Where do you typically find capital partners who are okay with getting paid out after 1–2 years via refi?
• Is there a standard split for equity vs preferred return in these smaller JV-style deals?
• Any platforms (besides pitching warm contacts) where people regularly partner up on these kinds of deals?

Do you see this equity + refinance strategy commonly used in small-to-mid size multifamily (8–30 units)?

Why do some investors avoid DSCR loans or bank funding even when the property qualifies? (Is it credit, paperwork, or time?)

Where do you typically find capital partners who are okay with getting paid out after 1–2 years via refi?

Is there a standard split for equity vs preferred return in these smaller JV-style deals?

Any platforms (besides pitching warm contacts) where people regularly partner up on these kinds of deals?

🙋🏻‍♂️ My background:

• I operate through a U.S. LLC with a U.S. partner who can sign on DSCR loans
• I’m comfortable sourcing, analyzing, and managing Section 8 / value-add units
• My goal is to move up into real multifamily operations, not flip or wholesale

I operate through a U.S. LLC with a U.S. partner who can sign on DSCR loans

I’m comfortable sourcing, analyzing, and managing Section 8 / value-add units

My goal is to move up into real multifamily operations, not flip or wholesale

Just looking to understand how you all scaled from small duplexes and quads to bigger, more impactful deals, especially if you started with limited capital like me.

Thanks so much in advance — open to feedback, ideas, and potential connections if you’re doing the same or looking to collaborate!

— Eduardo

Frank Pyle · Answer

Eduardo, great post. You're thinking like an operator already.

Yes, the equity + refinance model is used often in the 8–30 unit space. I’ve used it myself and helped others structure similar deals. The key is setting clear expectations with investors up front—this isn’t a monthly cash flow play, it’s a 12–24 month value-add strategy.

Some investors avoid DSCR loans because of the higher rates or because the properties don’t cash flow well enough on day one. Others just don’t understand them. But if you underwrite the timing right, DSCR loans are a solid takeout strategy.

For capital, warm network is best—especially people with retirement accounts they can self-direct. BiggerPockets messages and investor-focused groups can also work if you present a clear deal structure. A simple one-pager explaining the project and returns goes a long way.

For structure, I often see 8% preferred return with a 50/50 or 70/30 equity split depending on roles. If you’re running the deal, you should be compensated accordingly.

You’ve got the right approach—keep going.

Eduardo Cambil · Answer

Thanks so much, Frank — that means a lot coming from someone actually doing these deals.

Your breakdown is super helpful. I’ve been focused on setting up a structure where investors clearly understand this is a 12–24 month value-add play, not just a cashflow-first deal. I agree that underwritten properly, DSCR loans are a great exit, especially if the NOI boost is clear from day one.

I’m currently preparing a 1-pager + deck for a few 8–12 unit deals I’m analyzing, and I’ll be reaching out to warm leads and IRA-friendly contacts. It’s good to hear that 8% preferred + 50/50 or 70/30 is a common structure — that’s exactly what I had in mind.

Appreciate you sharing your insights and contact info. I’ll reach out directly as I’d love to learn more from your experience and see how you’ve made these types of deals happen.

Thanks again!

— Eduardo