Line of Credit On Rental Properties

[Jeet Sangha]

Hello BP,

I currently have 8 residential rental properties with approx $5M in equity. I do not want to refinance them because I have low interest rates on all. However, I do want to access my equity to purchase more properties. I am looking for a lender that does consolidated line of credit or a commercial line of credit. I'd really appreciate it if you have great referrals for me. 

I'm open to other ideas as well that can help me tap into my equity. 

Thank you so much for you inputs,

[Andrew Postell]

@Jeet Sangha it sounds like you want to have a 2nd position Line of Credit on several investment properties. If I am misunderstanding this please let me know. This is just not anything that is occurring right now. I mean, I cannot speak for all 8,000 lenders in the US...but I would be willing to bet that no lender would be willing to do this. Is it possible to get a Line of Credit (LOC)? Yes, of course! But even if you got 1 Line of Credit that lender would require to absorb your current loan balance.

For example, a property you own is worth $200,000. You have a mortgage of $100,000. LOC are usually at 70% of the value, so $140,000 limit...but it would start with a $100,000 balance because they would pay off that 1st mortgage. The LOC lender only wants to be in "1st position" with a LOC.

This is pretty standard in investment properties. So if there was a way to maybe payoff one of the lower balanced mortgages, and then get a LOC on that one property, that would be an idea. Or maybe just taking the lowest balanced property and having a LOC that starts out with that balance maybe that's another idea.

I hope all of that makes sense.