My brother and I own 40 acres of farmland. 50/50 split. I was wondering how does that work if I wanted to use the 50% I own to get a line of credit on it to purchase rental property?
Interesting question so I started searching around. I found a good article about Land Equity Loans. It's good idea but only useful in specific situations. In my opinion it's very similar to HELOC; it's a short term tool to get you into a long term fixed rate loan. If you're splitting equity with your brother it could be more complicated. You also need A LOT of equity or better yet own the land out right.
You can ask your local lender but I would guess you and your brother would have to put up entire 100%. 50% of a property owned by an unrelated party is worth almost nothing, especially to a bank. They don’t get any of the income and they would have a hard time selling to recoup their money if you didn’t pay and your brother didn’t want to sell.
Interesting question so I started searching around. I found a good article about Land Equity Loans. It's good idea but only useful in specific situations. In my opinion it's very similar to HELOC; it's a short term tool to get you into a long term fixed rate loan. If you're splitting equity with your brother it could be more complicated. You also need A LOT of equity or better yet own the land out right.