Leverage Equity to Buy More Property: 8 Proven Tactics for Growth

One of the most powerful tools in real estate investing is equity. Equity is the difference between what your property is worth and what you owe on it. Over time, tenants pay down your mortgage while property values increase, creating equity you can leverage. In 2025, with property values holding strong in many markets, knowing how to leverage equity to buy more property is essential for scaling your portfolio. Here are eight proven tactics for growth.

1) Cash-Out Refinancing

A cash-out refinance replaces your current mortgage with a larger one, giving you access to the difference in cash. For example, if your property is worth $300,000 and you owe $180,000, a refinance at 75% loan-to-value could provide $45,000 for your next down payment.

2) Home Equity Line of Credit (HELOC)

A HELOC works like a credit card secured by your property. You borrow only what you need, repay, and borrow again. HELOCs are flexible and ideal for short-term needs like down payments, renovations, or covering closing costs.

3) Home Equity Loan

Unlike HELOCs, home equity loans provide a lump sum with fixed interest rates and predictable payments. They’re useful when you need a specific amount upfront, such as for purchasing or renovating another property.

4) 1031 Exchange with Equity Reinvestment

Selling a property and reinvesting equity through a 1031 exchange lets you defer capital gains taxes. This allows you to roll equity into larger or more profitable properties while keeping more of your money working for you.

5) Cross-Collateralization

Some lenders allow you to use equity in one property as collateral for financing another. This tactic reduces the need for cash down payments, though it ties multiple properties together under one loan. It’s a high-leverage move that requires careful risk management.

6) Partnering with Investors

You can use equity as your contribution in a joint venture. Instead of bringing cash, you bring equity from an existing property. Your partner may provide additional funding or sweat equity, allowing both of you to grow faster together.

7) BRRRR Strategy (Buy, Rehab, Rent, Refinance, Repeat)

The BRRRR method is built on recycling equity. You buy distressed properties, renovate to increase value, rent them out, refinance to pull out equity, and repeat the cycle. This strategy accelerates portfolio growth while keeping capital recycling.

8) Portfolio Loans

Lenders sometimes allow equity across multiple properties to secure a single larger loan. This strategy works well for investors with several rentals, letting you unlock equity from multiple assets at once for bigger deals.

Example: Using Equity to Scale

Imagine you bought a $200,000 rental five years ago with a $160,000 mortgage. Today it’s worth $275,000, and your loan balance is $145,000. That’s $130,000 in equity. A cash-out refinance at 75% loan-to-value gives you $61,250 in cash. You use it as a 20% down payment on a $300,000 duplex. Now your equity snowballs into new properties, multiplying wealth.

Pro Tips for Leveraging Equity

• Run the numbers: Ensure rental income from new properties covers debt service and expenses.
• Keep reserves: Don’t strip all equity — keep a cushion for emergencies.
• Balance leverage: Equity can scale wealth but increases debt obligations. Use it responsibly.
• Work with investor-friendly lenders: Not all banks understand creative equity strategies.

FAQs About Leveraging Equity

Q: Is it risky to pull equity out?
A: Yes, it increases debt. But if new properties cash flow well, the risk is manageable and can accelerate wealth.

Q: Which is better — HELOC, cash-out refinance, or home equity loan?
A: It depends on your goals. HELOCs are flexible, refinances often provide the most cash, and home equity loans give fixed terms.

Q: Can I use equity for down payments?
A: Absolutely. Many investors use equity as the seed money for their next property purchase.

Q: How soon can I access equity?
A: Most lenders require at least six months of ownership before refinancing. Significant equity usually builds over several years.

Q: Will leveraging equity hurt my credit?
A: Adding debt can affect credit utilization, but responsible management and on-time payments often strengthen your credit profile.

Bottom Line

In 2025, learning how to leverage equity to buy more property is one of the most effective strategies for real estate investors. From refinances and HELOCs to partnerships and the BRRRR method, equity is the fuel that powers portfolio growth. The key is balance: unlock equity responsibly, reinvest wisely, and protect your financial stability. Done right, equity becomes the engine of long-term wealth.

Next step: Explore more financing strategies on our Resources page. Related reads: BRRRR Method Explained, Using OPM in Real Estate, and Use a 1031 Exchange.