Growing your business: Partners vs Cash Out Refinancing?

[Dustin Beam]

Hello Beautiful People of BP,

I'm always attempting to think about the best way to keep progress moving forward, so I'm semi-planning out my next step(s). My current situation is not a bad one as I believe I have around 40-50% equity in my investments (put 30% down, increased rent, fixed damages), but I'm not real liquid. So although putting 20% down on a SFH or maybe a duplex or whatever would probably be feasible, I'd rather get a small portfolio or MF purchase. So I could not currently buy a whole lot with the normal 20% down financing without....

...cash out refinancing, taking a partner, or both. 

Refinancing would essentially allow me to take out all cash I have in it (assuming it appraises for what I think it would). I believe it should still cash flow, but obviously much less if I did that. Pros: Full owner of more property, full control of decisions.  Cons: Not only decision maker, "riskier" since more leverage

Taking a partner would be an ok idea too. I personally do not have a person that has agreed to such, and I haven't been the best about networking (my plan is to do better with that). Pros: Reduce overall risk, have help to shoulder inevitable burdens, keep more cashflow from current property.  Cons: Have to find a partner, probably still will need to cash out refinance some equity, share decision making which could be a problem.

I figure most people have to do one or both along their way, assuming substantial growth is their goal. It is mine, and saving 20% down is not going to cut it. My only real concern about doing cash out refinance is that I haven't been doing this long enough to go through a downturn in the market. I don't want to set myself up for failure.

Which method do you prefer?

(thanks for reading my book)