Newbie trying to understand how to scale

[Jennah Sontag]

Let's say I purchase my first door with a conventional loan. Then to get my 2nd door, is it better to finance with another conventional loan or get a line of credit by borrowing off my first property (then get a line of credit from my 2nd door to put toward my 3rd door and repeat the cycle)? I don't understand the risks involved with either approach to know which is better. Thanks for any insights!

[Robin Simon]

Every situation is different but generally the best approach is likely getting standalone conventional loans for your first approximately 1-5 properties (assuming your DTI can qualify and the paperwork is not too burdensome). Around hitting the 5 property mark is when most people reach the "second stage" where you are trying to scale and its not as easy to qualify for DTI that most people switch to commercial "DSCR" loans or HELOCs etc.