1031 Property Equity for Personal Line of Credit

[Jason Junkins]

Good afternoon.  Does anyone know if you have a 1031 property where it is fully paid off, may you use the equity to get a line of credit for non-commercial purchases?  If so, is there a waiting period that you must own the 1031 before doing this?  Thanks in advance.

[Dave Foster]

@Wayne Brooks, Thanks for that kind shout out.  @Jason Junkins, after an exchange has completed there is no statutory holding period before you can refinance.  The joke in our industry used to be that you needed to wait long enough to put the pen down that you signed the purchase documents with.  And pick up the pen you would sign the loan documents with.

As@Bill B. said, there is concern when doing it before a 1031 exchange.  But after an exchange the argument is that you are not accessing your own money.  You are borrowing the banks money secured by your equity - and paying interest as proof.