First Swing at Mid-Size Multifamily - Best down payment strategy?

[Tyler French]

Hi all,

I currently have 3 four family buildings, and have been saving and working through some financing options to scale to a larger 18+ multifamily. I would like to do so without selling the current 3 buildings.

There is a 24 unit for sale currently in my area that is value add listed for 1mm, after raising market rents and some cosmetic renovation worth 1.5mm. I have about 70k cash (not including reserves for properties), and probably about 120-140k in obtainable equity in the current buildings. However, I also do not want to refinance as they are very strong rates, and HELOCs are very hard to come by i've found for investment properties.

Wanted to get your thoughts on best approach to finance:

1.  I was offered about 140k in credit line. Could perhaps combine with my current cash  and let it season. Then see if i can get a conventional loan at 20% down, and pay down the credit line with the cash flow. (Property would cash flow to cover loan payment, credit line payment, etc until paid off or refinanced)

2.  I believe i can get a loan for the property at 10% down with an investor group since their is some cosmetic rehab. 

Any thoughts greatly appreciated!

Tyler

[Tyler French]

@Chris Seveney Thanks so much for the feedback. I have gone solo for all prior deals and am new to the partnership approach. Here are two things I feel I haven't yet learned enough about:

1. How common are partnerships where the more passive partner only provides capital and get a return after a given time period rather than % of cashflow permanently? Since I am handling all of the property management, finding the deal, etc I would prefer to be able to pay them out after value add work has been done, refinance, etc.

2. I unfortunately don't yet have anyone in my network that has the capital to partner on this. Are there any venues besides local RE chapters to do an all call for those interested?