Creative, financing, ideas for next Acquisition

[Carl S.]

Hi All

My good friend and I are building our REI business (Buy and hold MF, currently in DFW area) and while we feel that we do have a solid plan that will get us to our goal I welcome any suggestions (positive please!) on what other investors would do in our position.

Currently we own 2 duplexes (4 units) which we've owned for just on a year. They are appraised at $300k (total) which have a 65% LTV(appraised) 30year fixed mortgage on.

In the new year, we will have around $300k (cash in hand) to invest and we feel we have 2 choices,

1) continue to buy duplex/4plex cash deals (finding this very slow and possibly more expensive due to more mortgages of lower values)

2) obtain acquisition finance and "swing of the fences" (on our t-ball field) and look at a $500-$1mil price range Multi-fam which meets our parameters.

My wife, who helps us with the property management, has been in MF property management for 15 years with her last property being 910 units and her current property being a 525 unit lease up so in terms of management, we do feel they we had a firm handle (with track record) on the PM. Both my partner and I have built and run/sold our own small businesses so we do have a decent business track record too.

So I guess my questions are,

- Which option would you pursue, option 1 (cash purchases and then refi) or option 2 (obtain acquisition finance)?

- If 2, can anyone share some experiences or how you went about it, from making the offers to what loan programs/structures you used and how did you qualify for the for the loans (would be great if someone has done this using the rent roll from the new property?). Currently, if we chose this option, we would plan on a private money 2-4 year interest only loan and then a refi once we've improved the property and stabilized the occupancy. Any thoughts?

Any and all suggestions are most welcomed. Thank you in advance