Using existing rentals to finance more rentals?

[Chris Fleener]

Hi gang,

First time posting here.  Thank you in advance!

• Currently and have had for some time, 4 SFH long-term rentals in a community where vacancy rates are very low and they have cash flowed every year. Combined LTV for all 4 comes to roughly 26%.
• Have been considering leveraging the equity in these properties to use for down payments and increase our portfolio.  Hoping to diversify from this community into a nearby resort community and short-term rentals (condos).  Thinking there may be deals to be had this fall/winter depending on travel restrictions/etc.   
• What's the best way to go about this? In the past, I have used our current properties as backing for a LOC that I and two business partners then used to buy/sell some commercial properties. I believe I could get the same bank to back something similar for me alone given our track record. If possible, I'd love to NOT refinance and cash out what we already have because they are performing well and 3 of the 4 are paying down almost solely principle at this point (15 yr mortgages).
• Is this a smart way to leverage and access cash for down payments or should I be considering other options? Back of the napkin math tells me that if I could secure a line, we could buy several (3-5) small rental units and not have to average huge nights/year or income/night numbers to cover both the LOC as well as conventional mortgages on the new properties. Would use any excess each month (beyond rainy day funds) to pay the leveraged LOC down ASAP. Still need to get some local numbers for average nights/year, income/night and additional expenses (management, utilities, etc) to complete my calculations, but so far things look pretty doable if we're smart about what places we buy.

Other ideas?  Better options?  I've not been a huge leverage person in the past (aside from the one scenario I mentioned above) but it feels like I'm not taking advantage of what we've built and this would seem relatively low risk (if short-term rentals weren't producing and paying down the LOC pretty quickly after 6-12 mo, we could sell without much trouble in this community).

Thank you in advance!  I appreciate everyone's experience and thoughts.