Refinance for Line of Credit

[TJ Woolum]

Hello everyone,

I currently have a portfolio of 10 SFH rentals. 6 of these are on 30 year conventional mortgages with rates anywhere from 3.18% to 5.25%. 3 are on a 5/20 ARM at 5.1% and 1 I just closed on a 5/20 ARM at 6.8%.

Two of the houses I own need substantial renovations. I would like to flip them and BRRRR or sell outright but I'm out of money. My banker can give me a $60k line of credit but he wants to refinance these properties all into one commercial loan (5/20 ARM). Of course this rate is significantly worse than what I currently have on most of the properties and I estimate it will Increase my monthly mortgage (escrowed) payment by about $800 thus reducing my cashflow.

So my question is this… Do I eat the $800 reduction in monthly cashflow for a chance to get the line of credit, flip these houses, and pull out the cash? For context, each house needs $20k to $30k of renovation and will profit (after paying off mortgage and LOC) about $20k once sold.