How can I scale after first SFH?

Question

I"'m going to purchase a single family home and rent it out as my first investment property. Most likely going the conventional loan route to fund it. My question is after I purchase it how can I expand past my first single family home investment property. How would I purchase my next one and scale up?

Thank You

Greg Scott · Answer

Walking is just putting one foot in front of the other.  Once you get good at walking, you can try running.

Save up, buy a second property, go from there.

Tychua G. · Answer

@Brittany Minocchi  This is a great solution.  Do you know or have experience with any DSCR lenders?  (You can pm if you can't say here)

I have never heard this, is this relatively new?

Brittany Minocchi · Answer

DSCR loans. They don't factor in your DTI or your personal income - you're qualified based on the income of the property. The lender wants to see that the income will equal or exceed the monthly payment (principal, interest, taxes, insurance and HOA). Some lenders will allow income slightly lower than the mortgage, but the rate/terms aren't as favorable.

Tychua G. · Answer

Hi @Justin Brickman,  I think more specifically I meant to ask how to go beyond W2 lending programs.  Any thoughts?

Justin Brickman · Answer

There are many ways to make money in residential. You just gotta find what works for you.

Tychua G. · Answer

How do people overcome DTI limitations of a saturated RE portfolio?  Is commercial the only way to go?

Justin Brickman · Answer

Hey Juan I've scaled from 1 to 5 short term rentals in 2 years. If you're still looking for help with this, feel free to reach out.

Peter Vekselman · Answer

Great that you are in the game.  Expanding via rentals when you have limited cash and borrowing ability is difficult past a few deals.  if you are interested in scaling your business you need to consider alternative strategies like fix and flips, wholesale and maybe even some creative deals.  all these strategies have the ability to scale more but also have more risk with them and require a greater investment of time...

Sam Yin · Answer

@Greg Scott

Well said.

One step at a time. Since you are going to buy your first rental, get through a season of rental ownership first. Make sure it's something you can see yourself doing long term before you add on. Worse thing is finding out you do not like Landlording but added what you do not like to you plate prematurely.

How can I scale after first SFH?

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