Cash out refinance vs line of credit

[Curt Bixel]

I am trying to position myself to be able to take advantage of any disruption in the market due to the fallout from the coronavirus.  This does not seem to be like 2008, when housing was very much central to the problems, but we could still be looking at significant impact from job loss, rent loss, and a probably second wave of Covid-19 this fall  

In any case, I want to assure that I have funds at the ready to offer a quick closing.

I currently have received conflicting advice from several people whom I know and trust, and am looking for further advice to help me make the best decision possible.

The first suggestion is to simply get a line of credit.  This would allow me to have access to funds fairly rapidly, while not paying interest until I actually need the funds.  

The second suggestion was to go ahead and do cash out refinances on two of my rental properties so that I would have the cash available in my bank account.  I would, of course, have to pay interest until I used the money, but this would be much more dependable source of funds should things go south in the economy, because, should the economy suffer significant damage, it would be possible that the banks would pull back as well to manage risk, and would prevent me from drawing funds from my line of credit, right when I need them. 

As I look into this more, I am finding that it is a complicated issue and that there are upsides and downsides to either option.  I would be interested to hear what other experts have to say. I may even due a hybrid of both.  :)

[Richard Patrie]

Their both good avenues. I use a HELOC on my personal residence for cash offers. I don't foresee banks recalling credit lines if you use them and pay on time. If you start missing payments, that's a different story. I like credit lines because you can reuse them.