Freeing Equity in High Value Residential Property

[Account Closed]

I am advising a client who is looking to expand his real estate holdings. He currently owns a $4,000,000 primary residence with a $850,000 loan balance. Also owns a $1,800,000 4plex free and clear, $1,400,000 condo free and clear, and a $700,000 condo free and clear. Tax assessed values extremely low and high rents on all 4 properties, so would not make sense to sell (capital gains) or 1031 (increased property taxes). All are located in a 5 star SoCal location.

He has had trouble finding a traditional HELOC that will lend over $1,000,000, in part due to max loan balance restrictions, and part due to retirement DTI. The rates are very attractive on primary residences, but not worth the low balance (compared to the amount of equity that would be left un-allocated). Best option I am assuming would be a commercial blanket line of credit that would cover all 4 properties? I know a cash out refi would be easy on the 4plex but the flexibility of a line of credit is probably a better option.

Funds would be used for a variety of purposes, fix and flip, BRRR, and down payment on spec construction projects. If anyone else has experienced a similar situation (trapped equity in high value residential property) please share your creative solutions. Thanks!