Will/can my plan work?

[Brandon Keene]

Hey all, my wife and I will be looking at buying our first home less than a year from now. My goal eventually is to acquire 4 or so tri-fourplexes and eventually sell them for an apartment complex in 8-10 years. My wife is against house hacking, but not against rehabbing. Question is, we buy a home and fix it up (we’ll most likely want to stay there). Is it possible to refinance and use the obtained equity as a down payment on my first investment property? I’m hoping to convert a home into a tri-fourplex and repeat the process over 6-7 years or so (so long as zoning allows). Sorry for the ignorance I’m super new at this and currently in the planning stage reading books, podcasts, forums etc. just want to see if my plan holds any water. Thanks!

[Allyssa McCleery]

You can do a cash-out refinance to achieve this. Most lenders will only go up 75% LTV but I have heard of some lenders going up to 80%. With converting a home into a tri-fourplex, you will likely face difficulties with the zoning. Check on the property appraisers website to see how this property is zoned. You can apply for a variance but it may not be worth the effort. You probably would be better off finding an existing 4plex in need of rehab.