In practice, lenders who understand both small commercial income and residential collateral tend to be the most flexible, and keeping early deals simple and conservative usually makes scaling easier.

My bank will finance 100% with equity in another property as my down payment collateral.

I know people quit claim deed them after financing all the time, but my position is that this is a violation of the mortgage, because you are removing the collateral, especially if its a multi-member LLC.The level of asset protection should change with your net worth, but roughly here is what I would do:$0 to $1 million equity: personal name is fine, make sure you have a good lease, good insurance + umbrella policy.

I talk to at least 3 new lenders a week, they operate differently.These banks lend off “relationship + collateral,” not rigid guidelines. 

Instead, a few practical paths to consider: look at portfolio lenders or local banks/credit unions that will cross-collateralize or offer better pricing once you bring them multiple clean duplexes; selectively refinance older low-rate properties to recycle some equity while keeping DSCR conservative; or bring in limited capital partners for a few deals so you can keep 20% down and scale faster without blowing up returns.

The real question is how comfortable you are temporarily cross collateralizing to keep momentum moving.

However, I would not sell the assets you own (unless your market is declining).Ideally, you'd use a combination of using the subject property as the collateral and potentially using your owned-assets when/if necessary.

But if you can keep the original property and still qualify, that usually wins long term.Creative alternatives worth exploring before selling:– Cross collateralization or delayed HELOC after seasoning– 401k loan for part of the down payment– Buying a 2 to 4 unit that qualifies for 5% down owner occupied financing– Living very lean in the house hack for 1 - 2 years to rebuild reserves quicklyStart boring and scalable.Your first deal does not need to be perfect.

That way they are taking the equity as a kind of secured 'line of credit' that isn't coming from a second position lien.Do you have any debt on those properties or are they in a position where you could use some equity as collateral? 

I also underwrite the borrower, confirm insurance, and make sure there’s lender title protection — those steps alone help eliminate many of the common pitfalls I see new lenders encounter.If you’re just getting started, it’s helpful to get clarity on: • the collateral securing the loan • the loan-to-value • borrower track record • how your SDIRA custodian handles notes • what protections you should have in placeI’m happy to share what I’ve learned — I really enjoy helping people get started in private lending.