I am interested in multifamily real estate investing for buy and hold. I haven't bought my first one yet but looking to do so within 4 months. After I buy this first property I want to grow exponentially and buy bigger and bigger. How would I do that? Would I refi my investment property and put that money into my next deal? What have you all done?
Refinancing your triplex is an option, assuming either it has appreciated enough or you have forced equity through property improvements. Other than that, its really up to you to figure your strategy for acquiring more rentals. You could simply save up for the next down payment, you could partner with others, you could try to seller finance, there are a number of options. Its just one of those things you will have to figure out as you start to purchase property and opportunities start to present themselves.
Sounds like you want to reuse equity. As in, you don't think you can afford the second with your current finances. This being the case, there are three options.
- Refinance the Triplex after adding value to it thus increasing the equity in the property. Take the new cash out refinanced capital for next deal
- Take a HELOC on the Triplex for the equity trapped in the property between mortgage and valued sales price. Use for next deal.
- Sell. Take now larger pool of capital to buy a better deal or invest in two deals.
In many cases, buy and hold doesn't equate to scaling fast, especially on your own. Scaling fast requires increasing capital through either profitable deals in the short term (flips, value-add, brrrr, etc) OR new partnerships.