General LOC question -- vs. Cash out Refi

[Fausto Carosella]

Hey All,

I'm finding it difficult, perhaps impossible, to find someone to extend a Line of credit on the equity of a Single Family Rental.... I was hoping that it would be a possibility but it looks like the more likely scenario will be to cash out refi at a higher interest rate. The closest option to a LOC I've found - if you DON'T own the property outright - is to get a blanket LOC over several properties.... and even if you DO own the property outright most extend a Line of Credit at about 50%. I'm in Florida, is that a pretty typical scenario?

The value of the property itself is approx 300k and I owe approx 140k. Approx 70% of the rent covers the mortgage, so it cash flows pretty well, About 615 per month.... (only accounting for PITI).

I want to pull some of the cash out to acquire more rentals, (hopefully BRRRR) but my problem is I don't show much income, so my interest rate pulling cash out is about 7.5% (30 yr fixed) when I currently have 4.875% (also 30 yr fixed).... I'm thinking my best option is to cash out refi with an ARM which I'm HOPING will be a couple points lower enough to still cash flow on the original property and either refi out in a few years after showing more income, or blanket refi on the properties I (hope to) acquire.

Sort of looking for thoughts and/or guidance on this one... any help is much appreciated.