Creative Real Estate Financing
Market News & Data
General Info
Real Estate Strategies
![](http://bpimg.biggerpockets.com/assets/forums/sponsors/hospitable-deef083b895516ce26951b0ca48cf8f170861d742d4a4cb6cf5d19396b5eaac6.png)
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
![](http://bpimg.biggerpockets.com/assets/forums/sponsors/equity_trust-2bcce80d03411a9e99a3cbcf4201c034562e18a3fc6eecd3fd22ecd5350c3aa5.avif)
![](http://bpimg.biggerpockets.com/assets/forums/sponsors/equity_1031_exchange-96bbcda3f8ad2d724c0ac759709c7e295979badd52e428240d6eaad5c8eff385.avif)
Real Estate Classifieds
Reviews & Feedback
Updated about 4 years ago on . Most recent reply
Running out of Capital- Need Advice
Hello,
I started investing in buy and holds a couple years ago and looking to ramp up this year to hit a cash flow goal. I'm hoping to close on my 4th property next month and actively seeking to add 3 more as soon as I can.
One issue I see on the near horizon is running out of capital for down payments. I can probably finance about 1 more traditionally, but will start getting into a tight situation after that, so starting to explore creative strategies.
I know there are a lot of financing options such as hard money, Helocs, refinancing, LMAs, 401K loans/withdraws, etc., but not sure which makes the most sense.
Curious what others with experience think I should be looking into for my scenario. Beyond investment savings I have 401K and Trad IRA (rollover). The most equity I have in a property is about 90K at about a 60% LTV
I know this request is a little naive and a somewhat general "what should I do", but hoping to get feedback from others that have been there already and/or finance savvy through a real estate lens.
Thank You in advance!
Most Popular Reply
![Jody Sperling's profile image](https://bpimg.biggerpockets.com/no_overlay/uploads/social_user/user_avatar/1761438/1621515323-avatar-jodys18.jpg?twic=v1/output=image/crop=960x960@0x0/cover=128x128&v=2)
What I would say is, more properties doesn't necessarily equal more cash flow, so you may need to redefine what your goal is. If you have more properties, you're likely to build more long-term wealth. More properties means more tenants paying down more loans. As those loans pay down, you have more equity and a higher net worth, but your cash flow doesn't tend to grow much accept for rent raises each year.
Cash flow is a different game. I have two rental properties that cash flow $2,000 a month. I could refinance both properties, pull out around 200k and buy four more houses in my market with a comfortable cash reserve. Then I would have six properties each cash flowing about $200 a month for a total of $1200 so I'd lose about $800 cash flow monthly.
You won't find a ton of people who agree with my strategy, but I like to have fewer properties on smaller mortgages. I then use my larger cashflow to plow my open HELOC low enough to put a substantial down payment on a property and enjoy higher cash flow, which accelerates the next purchase.
Best of luck, no matter how you go forward!