Debt free. 6 apartments. What’s the best strategy to go bigger?

[Jake Diamond]

Currently debt free. I own 6 apartments. (1) 4 unit. (1) 2 unit. I want to go big. Bigger complex. What’s my best strategy for funds to go bigger? Line of credit on houses? Etc...

[Steve Vaughan]

Thankfully you're still dealing with residential property so can qualify for residential financing.  Commercial 5+ unit loans are much more of a pain and higher risk.

The answer depends on what your goals are.  If I just scratched and clawed for years to pay the mortgages off, I'd be less inclined to go back than if I inherited them and wanted to scale.

  If I wanted to scale, I'd slap a couple 75% cash out loans on them and carry on.  Costs will run about 3% of loan amounts generally.   Rates will probably be in the 5s. I'd keep them separate vs getting a portfolio or commercial loan product either way.