What Type of Financing Has Helped You Scale Your Real Estate Business the Most?

Question

For investors who have grown their real estate businesses beyond a few properties, what type of financing has helped you scale the most?

I’d be interested to hear about your experience with conventional loans, private money, hard money, DSCR loans, bridge loans, commercial financing, or other funding strategies.

Did you find that a particular type of financing made it easier to acquire more properties, preserve your cash reserves, or take on larger projects?

Also, what financing challenges did you run into as your portfolio grew, and how did you adjust your strategy?

For those who have successfully scaled, what factors do you consider when deciding which financing option to use for a particular deal?

Bryce Axelrad · Answer

I’m a transactional lender, so I look at how quickly the money comes back and what pays it off. We fund the purchase side of a double close in-house, with repayment coming from the resale. That’s a different need than carrying a rehab for several months.

For scaling, I’d map out how much cash each deal ties up and when it actually comes back. Include money you need between rehab draws, carrying costs and a slower exit. Being able to close the next deal doesn’t help much if it leaves the current projects short on cash. I can help work through the transactional side when that’s the structure.

Jay Toluganti · Answer

Mix of everything. I started with my own funds, then PM, Hard Money and DSCR for BRRR projects.

What Type of Financing Has Helped You Scale Your Real Estate Business the Most?

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