3 paid off rentals. Refinancing with small/no reserve account?

[Chad Carlon]

Hi. I have a portfolio of 17 SFHs in DFW with 3 that are now paid off; those 3 have around $500k in equity. Thinking about refinancing, to try BRRRRing, but I’ve been reading that I need 6 months of reserves for each of my rentals. I don’t have a reserve like that in place. Always used my brokerage account margin line for emergencies. Is there any flexibility with that reserve requirement when refinancing? Any suggestions for how to tap my equity? Really appreciate any suggestions or ideas.

[Dan M.]

Every bank is different call them and ask. If you have opportunity it would be great to have that capital ready to deploy. See if they will give you a line of credit as opposed to a mortgage then if a deal comes along you can snatch out equity as needed. Don't be afraid to use another bank if you get no as an answer it takes maybe an hour of your time and could make a big difference. 

Another good one is a HELOC on your primary. I closed mine free with no closing costs and have it ready to go when needed. Didn't cost me a dime and maybe was 5 hours of work total to fill out the forms and do the closing. Hope this helps!