Margin line of credit vs hard money or portfolio lending

[Wilson Liu]

Hi BP,

A partner and I recently purchased our first property in an LLC and we just refinanced with a portfolio loan at 4% 5/1 ARM amortized over 20 years. That rate does eat into our cash flow a bit and I was wondering about alternatives that may offer lower rates similar to a primary residence mortgage.

Been hearing about M1 Finance's Borrow program. It's basically a margin loan that can act like a line of credit (similar to a HELOC). Right now the rate is 3.5% or 2% if you join M1 Plus ($125/year membership). You can borrow up to 35% of your portfolio value. Of course the downside risk is that your portfolio tanks and they call your loan.

Anybody looked into this or have used this in lieu of more conventional financing?

Regards,

Wilson