Cash Hiding in Plain Sight

I recently closed on a property using cash.  But I didn't use hard money, and I didn't liquefy my brokerage account to get it. I used margin.  It's easy, flexible, and low cost.  And it was hiding in plain sight.

If you or your possibly money sources have a brokerage account, you may be able to use margin.  Traditionally used to make stock purchases, your brokerage firm may allow you to also use your margin for cash withdrawals. 

THE BENEFITS OF MARGIN

• FLEXIBILITY.  Similar to a line of credit, a margin account permits withdrawals and deposits of any amount, at any time. 
• LOW COST.  The interest rate on our account is based off of the portfolio value, and what is negotiated with the account manager.  Our rate is 4.25%, subject to monthly adjustment and a 6-month lock period.  Interest on any unpaid balance is paid automatically each month from cash in the account. 
• NO TAX LIABILITY.  Using margin allows access to a large part of the value of your securities without selling, and avoiding possible taxes.  

THE CAVEATS

• MARKET VOLATILITY.  Margin equity is based off of the value of the under-lying account.  If the account loses value, you may need to pay off part of your loan to avoid a call on your margin balance.
• VARIABLE INTEREST.  Depending on your margin terms, the interest on the outstanding balance could change quickly. 

If you're looking for short-term cash resources, consider margin.  It may be the funding source you've been looking for.