Hi BP community. I always wondered how investors are able to build their portfolio so fast (like 5 - 10 properties in 2 years, etc.)? I am looking to acquire my first property soon but wanted some ideas on how to proceed if the goal is to build the portfolio with buy and hold for the long term. How are/should the financing be tailored to allow for use of less cash to maximize the acquisition? I have almost 30K to invest.
@Patrick I. There are 6 billion "it depends" scenarios and only a portion of them depend on financing. You can go th owner-financing route, the BRRRRRRR (always so many R's) route, etc. to try and minimize the amount of capital to have contributed to the property. However, I will say that it's faster to go from properties 7-10 than it is from 1-2. Why? You just have cash-flow to replenish the coffers quicker. And it's also much easier to accelerate if you're in a low priced area (or invest in one). Trying to save up a "standard" 25% down for a property in San Francisco is quite a big different that doing the same in East Birmingham.
@Andrew Johnson Makes sense Andrew. Thank you for your input.
You can also partner with someone. This is one way to increase your properties. I have two with my husband and then the rest are with other partners. One partner that just invests cash into our company then I do all of the buying, managing, etc. It works very nice. The other partnership I have he does all the maintenance and I manage the properties. When we have applied for financing it has helped having two incomes too. I also highly recommend Andrew's response of Owner financing. Best of luck!
@Patrick I. most RE investors actually start off with some capital. In the first couple of years the buy a place, maybe two. Then they see how it is panning out and begin to get more aggressive with the acquisition side as they get multiple flows coming in. Most, do this while maintaining full time jobs and saving.
Now, there are tons of ways to make things happen faster. For example, if you go out and buy a 20 unit apartment complex, you got to skip 20 acquisitions. It also might not be that much harder to make that happen vs the single family approach.
Just know your situation is unique (it is your personal scenario). Just make sure to make smart bets and continue to learn as much as you can.
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