Need advice on how to pull equity

[Rainier Guiang]

Hello, this is my first post on Bigger Pockets.

I was hoping someone could advise me on how to pull equity on an investment property (condo) I own in the state of Florida (free and clear - no mortgage) for a future investment property in California (where I live). I know there are home equity lines of credit and home equity loans. I dont need a hard money loan as I have decent credit. Thanks!

[Jon Holdman]

There are trade offs between a fixed loan and a line of credit.

Line of credit

-Harder to get on investment properties.

-Can be blocked by lender at any time without notice

+may have a lower interest rate

+only pay interest when taking the money

+interest only if not locked

-shorter term if locked (i.e., you want to keep the loan in place while you hold a property)

-Usually higher rate when locked

Mortgage

+more commonly available for investment properties than lines of credit

-pay interest starting at closing

+locked in long term money, good if you're using this to buy something to hold

+no locking or calling

I think a line of credit makes sense if your going to pay the money back fairly quickly. Such as using it for fix and flips or to buy with cash and then refinance. OTOH if you're using the equity from this house as the down payment for another and you don't plan to pay it off quickly a mortgage will give you a longer term, fixed rate loan.

Smaller banks are a better bet than the big boys. Start calling banks in your area and asking about RE investment loans. Most will say no, but ask if they know a lender that does them.