Take out $100,000 line of credit?

4 Replies

The bank has offered me a $100,000 line of credit on a single-family property I own.
The interest rate they offered was 4.125%

I've been holding off because I instead was going keep saving until I invested in the next property.

Any thoughts?


Good you are prequalified.  Have you decided where you want to invest and will be a sfr or multi-unit.

Use the equity in your property (the LOC) as down payments for other properties that you can trap at least the same amount of equity that you used( so in this instance $100,000) and then do it again with the next set of properties. Eventually your line of credit will be much larger than $100,000. You can also try and find a bank that will cross collateralize the equity. Most local banks will be willing to do that.

That's how I buy properties. I hardly ever come to the table with money. All my property is cross collateralized or bought with OPM (if cross collateralizing is maxed out). Local banks where I live will lend up to 85% LTV so I try to buy below that number so that I can eventually use the difference of LTV on the next deal. So if I buy at 50% LTV and stabilize the property, I can use 35% of the equity in that property for another deal. I have short amorts on all my property so after a few years, I will have already paid down my principal to lower than 85% LTV with rent income.

Make sense?

@Joemoore Well the only way I'd get into SFR is because I'd like to flip and continue with the next property.
Using that money to invest in Buy and Hold Multi-Family.

That's where I'm a fork in the road.
SFR and flip or Multi-Family and hold.

@TravisBaucom I defiantly understand. It's something I've never done so it's probably the hesitation in me that's preventing me from doing it.
If you see what I wrote to Joe up above.. That's where I'm at right now.
I'm so excited to continue it's just that I don't know in which direction to go just yet.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here