From one duplex to multiple

[Ashley Phillips]

I currently own a duplex (live in one side and rent the other out). My duplex is worth about $405,000 and I owe 245,000. I would like to use the equity I have built up in my current duplex to purchase another investment property. What lenders do you recommend to work with to access the equity in my duplex and how do I go about purchasing another property and not paying the 20-25% down. I was told that for investment properties the down payment is larger than if I were to live in it as my primary residence. Who has any creative ways I can go about making this happen?

[David Jesperson]

Congrats on your first house hack! You should be able to rent the unit you are currently in and just repeat the process with another single or multifamily if you want to grow that way. In most cases you're only required to have 3-5% for a primary residence, I would say that's one of the most common ways people get started in REI. 

Otherwise most lenders will want you to have 20% equity in some way, you can find some that will allow the equity to come from a refinance. For example, you could use hard money to purchase and rehab a distressed property and if your total owed on the hard money loan is still below 75-80% of the ARV of the property you potentially could purchase for no or little money down. It's called the BRRRR strategy (buy, rehab, rent, refinance, repeat). Eventually you may be able to find a commercial lender that will loan purchase and construction costs up to 75-80% of ARV and you can eliminate a few of those steps. But you will need a relationship and successful track record with the commercial banks before they will lend most likely