Has anyone ever used a loan against a stock portfolio to finance?

[Adam Sankowski]

Hi!  Has anyone out there ever used a loan against a stock portfolio or a margin loan to finance real estate?  (I want to finance a rehab)... 

I'd love to hear from someone who has done this!  Everything I look up makes them seem like a solid option but its hard to figure out who to go through for them.  Seems like you need a "wealth management" advisor to get one through Merrill or JP or Schwab (something I'd like to avoid!)

Any margin call or stock loan horror stories?  Any recommendations for companies that anyone has used?  Thanks so much for any advice!  

[Brian Kantor]

Yes! I'm doing this right now, and despite the rising interest rate environment, am very happy with this decision. This is essentially the same thing as a HELOC, but using your stock portfolio as collateral instead of your home.

NOTE: I am a user of this strategy and AM NOT AN EXPERT OR A CERTIFIED FINANCIAL PLANNER, so take this with a grain of salt. But here's what I can share:

1) There is a ~$100k asset minimum (give or take) needed in your account in order to do this.

2) This can't be with an electronic/self-managed brokerage account; it must be held with an investment professional

3) Like a credit card or HELOC, there is a minimum monthly payment, but there is no fixed amount or term.

4) The rate is variable, changing daily, but right now I am paying about 6.5% with the current interest rate environment.

5) You cannot borrow against the full value of your portfolio, just a pre-determined percentage of it. This is to keep you solvent in case of a market drop.

6) The more diverse your investment portfolio, the higher the above percentage can be; the less diverse the smaller amount you'll be able to borrow. (Index funds, bonds and cash are way better than having all of your money in Tesla or Gamestop

7) I do mine through my financial planner at Ameriprise and he uses a Goldman Sachs account.

If you PM me, I can share my planner's contact info.

Long-story short, this is an amazing option that is extremely underrated. But speak with a professional for details and discussion on risk. The biggest risk being that if your investments tank, you will immediately be forced to sell some of your stock to cover the difference.