Hitting the 10 mortgage limit

[Seth Mosley]

suggestions as to what I should do hitting the 10 mortgage limit? I could do hard money but that doesn't seem to be a good long term solution. Or just go all commercial? Any thoughts?

I'm currently at 7 conventional mortgages and 1 commercial mortgage, on a total of 19 rental units in tennessee.

[JT Spangler]

@Seth Mosley: sure! A Home Equity Line of Credit is a line of credit secured by equity in your primary residence. Basically it's a credit card with a limit set by the equity in my home, lender terms, and my credit score.

So, let's say my house is worth 200k, and I owe 100k. I have 100k in equity. Most of the banks I've talked to will do 80% LTV, which means they'll take 80% of the value of the home, minus what you owe, and that's the amount that is in your line of credit. In our example, 200k * 0.8 = 160k -100k = 60k you can use however you like. Rates are typically prime +1% (more or less, depending on your credit score). You only pay interest on what you use, and you can make minimum payments for terms of up to 20 years. For me, it's a source of cash I can use short term with rates way better than hard money.

If you use a HELOC to buy a jet ski, it's a horrible idea. But if you use it to invest in an area where returns exceed the interest you'll pay on the line of credit, I think it's a smart play.

Would love to talk to you more about your investing -- let me know next time you're coming up to Nashville and maybe we can grab a coffee or lunch.