Investor · Plainville, MA · Member since 2014 · 9 posts · 3 votes
looking for advise on taking equity out of a rental i want to continue to hold . Whats good whats not .tax liability, want to use for another investment but dont want to tie them together. Thanks for the help
Hi @Peter Groh taking equity out of a rental will not create income for you, so you will not have any tax liability from the transaction.
You will have a liability on your books.
The best thing to do would be to contact all the local banks and credit unions in your area and explain them your situation and they should be able to provide you with Loan-to-Value and interest rate and loan terms information.
I did something similar with one of my properties, except I got a line of credit, rather than a loan. It gives me flexibility for spending, while the bank holds a variable rate (something to keep in mind).
For instance, I got the line, then used that to immediately purchase another cash flowing duplex.