How to expand you real estate portfolio?

[Paul Caporali]

Lets say I spend all my money on the down payment for a multifamily rental home. How would I afford another down payment for when I buy another multifamily? Would I save up my income from tenants? That would take YEARS to be able to afford another piece of property. Any advice would be great thanks!

[Ryan Blake]

@Paul Caporali For this kind of situation, you would want to pick up a property that needs work. Ideally undervalued by 20% or more. Make the repairs using a hard money loan. After 6 months, get a new appraisal and refinance the property. If you bought right and only made the necessary repairs, you should be able to pull out all or most of your money. Now you have a rental with no money invested and you are ready to move on to another. Check with your lenders about how long they need a property to "season" before you can refinance. Make sure you have something lined up before you jump into a property with this plan. You don't need pre-approval or anything that formal but at least know that they will refi the property given an appraisal.

For further research, read up on the BRRRR strategy (Buy Rehab Rent Refi Repeat). There are tons of videos and posts about this on Bigger Pockets.