Commercial Financing on small multifamily

[Pete Harper]

We are looking for financing for a 10 unit apartment complex in Conroe, TX. We will be doing a 1031 exchange and will be putting a substantial down payment. $700k on $1.1M property. Financing will be held in LLC. Property will provide positive cashflow after debt service.

[Pete Harper]

Quote from @Alfonso J.:

HI @Pete Harper,

On multifamily you can get up to 80% leverage. Why not maximize your leverage and diversify your liquidity and get multiple properties instead of putting it all into one?

I don't like to carry a lot of leverage. My strategy is to buy properties with mostly cash that cashflow. I use the cashflow to drive appreciation organically. Properties pay for their own renovations as I turn over tenants. After the property is fixed up I refinance and pull all my equity out and buy another one. Classic BRRRR If I leverage at 80% I'm stuck once my capital is used up. This doesn't scale. BRRRR scales infinitely.