Author Topic: Adding a rental using line of credit  (Read 1172 times)


  • 5 O'Clock Shadow
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Adding a rental using line of credit
« on: November 12, 2014, 03:32:26 PM »
We currently have two rentals both doing well positive cash flow, that goes to Vanguard every month. We bought both with the traditional 25% down. Would like to add a 3rd but donít have the down payment thinking about using a line of credit against one of the rentals for downpayment. Advice or pitfalls? What percentage of the house value can I borrow since it it non own occupied?


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Re: Adding a rental using line of credit
« Reply #1 on: November 13, 2014, 11:31:25 AM »
Probably won't happen.  How much equity (percentage-wise) do you have?  You'll likely have to find a smaller, local bank or credit union who will do it.
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  • Bristles
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Re: Adding a rental using line of credit
« Reply #2 on: November 13, 2014, 11:46:01 AM »
I have LOCs on several of my properties but I had paid cash for them and had no other financing.  I forget what LTV they are but if you already have loans on the properties, I doubt anybody will do a greater than 75% LTV LOC.  If you have had good appreciation since you bought, maybe.  But there are going to be flat fees that will make a small amount even more expensive.

What about saving up the monthly cash flow instead of investing it at Vanguard?  Yea, I've been in cash a lot through the stock market run up but those are funds looking for a home in real estate instead of being able to be invested elsewhere.