Can rentals have LOC on them?

2 Replies

Is it possible to pull a line of credit out on a rental duplex.  We have a duplex that We refinanced(02/2021) with our current mortgage company We were unable to pull equity out even though we have about $600K in equity in the rental. 

Yes, is should be doable, since you have so much equity. For LOC's most banks will only loan 70-80% LTV, so you'll have to deduct your first position mortgage and see what's left to borrow against. Also, most banks will do a LOC using multiple properties as collateral. This is great to increase your credit line, but they will want equal collateral if you go to sell a property that has been collateralized for your LOC.

I really like LOC's because the points and fees on mortgages really start to add up, especially if you aren't in the properties long term. Also, LOC's allow quick access to your money, so you can do a quick close when it helps get a deal done.

I have done exactly this. It took a lot of phone calls though. Try calling a bunch of credit unions in the area. Tell them upfront it's a rental property and not your primary residence, and you won't get your time wasted.

Marko Rubel
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