How to accelerate portfolio growth?

[Wilson Lee]

I’ve been buying rentals for 4 years. I’ve averaged it purchased every 9 months.

I have just enough working capital to leverage my way through a project and then cash out refi.

I want to move on to doing larger multi family or more than one property at one time. But I haven’t come across a financial product or strategy to assist.

We primarily purchase 2-4 unit buildings and rent them. But the growing is slow.

Have any of you made the jump from doing one deal at a time to multiple deals. What changed? What did you do that enabled you?

[Alex Sanciangco]

Hey Wilson - I haven’t personally done this myself but I’ve been keeping these ideas in my back pocket for when I do get to that point. 

The two strategies I come across a lot in my research are the 1031 exchange and the HELOC (Home equity line of credit).

In general, the 1031 exchange enables you to sell a property and then use the funds to purchase a similar asset without paying taxes on the profits. (I’m not a lawyer / CPA so I recommend speaking to a tax professional about this since there is a specific process). For you, this could mean selling one of your properties then using the profits for the down payment on a larger multifamily. You could do this again and again, rolling that small multifamily into larger and larger apartment buildings.

From the stories I’ve heard about HELOCs, you could potentially wrap up all your properties under a single umbrella and borrow against the combined equity of all of them. This can potentially enable you to do multiple projects at once, or make that jump to larger multifamily projects since you’ll have a larger bucket to pull from. 

Hope this helps!