Building a SFR portfolio from(almost) scratch

[Kris Reeves]

So here is the question: if you were looking to build a portfolio of 50-100 SFR, you have 2 great W2 incomes, perfect credit, and $50k to start it with, where do you begin? Do you build slowly, and start with 1, traditional financing, 20% down, etc.? Do you raise private money along with your money to purchase a nice, existing cash-flowing portfolio? Flip your way into the rentals(or BRRRR)? I would love to hear your feedback, and all feedback is welcome.

[Bob Green]

Hello Chris,

I have grown my portfolio by buying distressed real estate at 30-60 cents on the dollar.  We buy them, rehab, place a renter and then refinance cash out original down payment funds and recycle the same funds into the next project - repeat process.  It's important that you are working with lenders who require little or no value seasoning so that you can refinance cash out up to 75% of fair market value after tenant is placed.  This is key to cashing out original down payment funds to use for the next project.  Once you have completed 2 real estate transactions successfully, I would apply for a acquisition and rehab line of credit.  With this strategy, funds are set aside for you to use. You can acquire and rehab property with 10-20% of your own funds, and remaining funds required come from line of credit.  Then place a tenant, and refinance cash out original down payment funds up to 75% of fair market value - repeat process.

Best of luck!