Leverage Strategy

[Armando Payano]

Hello BP

We are in Phase 1 of acquisitions for our buy and hold strategy. Our plan in Phase 1 is to acquire 1-3 inexpensive SFH avg >100k for cash, that cash flow. Not having to incur closing costs really helps to boost returns. We then plan to refinance or use a HELOC to leverage these investments into more units.

We've acquired 2 out of the 3.

Phase 2 we plan to acquire 2-3 small multi family properties consisting of 8-20 units each. During this phase we plan to use conventional financing to take full advantage of the lower cost terms. After these investments we doubt that we will be able to obtain any more conventional loans which will put us into Phase 3.

Currently our DTI is strong and would be going in with 20-30% DP so we don't anticipate a problem securing financing.

My question is, should we hold off on refinancing or using a HELOC on the units we own until after we have secured financing for the higher cost investments?

Any ideas and thoughts are greatly appreciated.