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Updated 12 months ago on . Most recent reply

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Mike Mutabazi
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How do you scale from one property to multiple properties and have them cash flow ?

Mike Mutabazi
Posted

Hello BiggerPockers family , 

I'm a beginner investor, how do you scale from one property to multiple properties. My question is based on the following:

lets say you put down 20% on 300K property which is 60k (plus closing costs ) and you are breaking even with you mortgage + other expenses(taxes ,management fees,...) included. How do you scale from this one property to 10 or more properties without putting downpayment on each one.

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Konstantin Ginzburg
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Konstantin Ginzburg
Replied

@Mike Mutabazi

If you are planning on getting traditional financing for each property, then you will need to find some way to provide a down payment. There are no lenders I am aware of that offer no money down financing options. The lowest option that is common is a 3.5% down FHA loan that is used for a primary residence. Most investment property will required 20-30% down payment, depending on the lender. One option that might work for you is to partner with others who are willing to provide the down payment capital in exchange for equity in the property if you are willing to do the leg work for it. There are options such as a BRRRR that would let you scale faster but doing so would require you to do a cash out refinance. If the property is currently breaking even, then it likely will not be possible for you to do a cash out refinance while still maintaining break even monthly cash status. In that case, the best option remain is likely to wait for appreciate to raise the property and rent in the future to provide more cash out refinance options or simply find other ways to come up with additional down payments. Real estate is not a get rich quick strategy so time and patience are usually needed to scale operations.

  • Konstantin Ginzburg
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