Adding a rental using line of credit

[flyingduck]

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 don’t 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?

[arebelspy]

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.

[Bobberth]

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.