Portfolio Line of Credit

Realtor · Memphis · Member since 2021 · 48 posts · 26 votes

I am not sure if this is the right forum for this question but I want to know how can one get a portfolio line of credit on rental properties. What are the requirements? Thanks,

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Henry ClarkPro Member

Developer · Member since 2020 · 4k+ posts · 4k+ votes

OP. Couple angles.

Short versus long term line or loan.

Asset base. The rental units or stocks/binds/cds/mm

Simply talk with your banker or lending institution.

1. Only use assets that match your line or loan time frame. Example stocks you plan to sale in the next 3 years might not be a good asset collateral for a 20 year term.

2. To the degree you can transfer the management of financial investments under the bank, the more favorable treatment you will get. For example if you have CDs or mm at one place. If you can move them to this new lending entity. They want control over disposition.
3. You might have a stock position at an investment firm, the lender will want disposition control over it. Plus regular statements for value.

4. If your talking about owning say 5 properties and want to use all of them for a line of credit. Then talk with your lender about cross collateralization on those properties.

If you do this. Ask for 1% point less. If their rate is 7% ask for 6%. Since you’re giving them a liquid asset for collateral.

If a balloon term on the Longterm loan. Say 3/5/7 years. If they offer 5 years, ask for 7 year balloon period if that fits with your plans. Again they are getting a more liquid, marketable investment as collateral.

But again, it makes it harder for you to switch lenders or to liquidate those assets.

Makes for a great team relationship with them though.

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
1y
quite a few good brokers on BP @Jay Hurst might be able to help you.
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Henry ClarkPro Member
Developer · Member since 2020 · 4k+ posts · 4k+ votes
1y
OP. Couple angles.
Short versus long term line or loan.
Asset base. The rental units or stocks/binds/cds/mm
Simply talk with your banker or lending institution.
1. Only use assets that match your line or loan time frame. Example stocks you plan to sale in the next 3 years might not be a good asset collateral for a 20 year term.
2. To the degree you can transfer the management of financial investments under the bank, the more favorable treatment you will get. For example if you have CDs or mm at one place. If you can move them to this new lending entity. They want control over disposition.
3. You might have a stock position at an investment firm, the lender will want disposition control over it. Plus regular statements for value.
4. If your talking about owning say 5 properties and want to use all of them for a line of credit. Then talk with your lender about cross collateralization on those properties.
If you do this. Ask for 1% point less. If their rate is 7% ask for 6%. Since you’re giving them a liquid asset for collateral.
If a balloon term on the Longterm loan. Say 3/5/7 years. If they offer 5 years, ask for 7 year balloon period if that fits with your plans. Again they are getting a more liquid, marketable investment as collateral.
But again, it makes it harder for you to switch lenders or to liquidate those assets.
Makes for a great team relationship with them though.
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Alexis Sostre
Lender · Los Angeles, CA · Member since 2020 · 65 posts · 15 votes
1y
I can help you with portfolio line of credit. Sent you a connection request
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