I just got a HELOC on my investment portfolio, so I can buy my next building with "cash".

I dumped all my operating funds in my HELOC to minimize the interest.

Now, I get a wrenching gut feeling that this HELOC can get frozen and I won't be able to buy anything new.

Please, give me an advice: what would you do?

@Dennis Nikolaev

So if I understand correctly, heloc is not currently frozen? If so and you’re worried about that possibility, ... leverage it? Tax man will likely want a paper trail so talk to an accountant. You’re one of many hundred thousand LL’s who are currently learning about liquidity.

Account Closed

Yes, I am worried. Now everything is alright. However, as soon as the markets will start shaking, I expect banks to start freezing HELOCs.

I wonder how to "save" my liquidity.

what do you mean "leverage it"?

I don't think the bankers can just freeze a HELOC. You should read your loan agreement. I have a HELOC. I didn't read my loan agreement. I did grab a little more out of my HELOC. But I'm pretty sure unless you miss a payment or something. The bank can't just arbitrarily freeze it. But again without reading your loan agreement......

I have never heard of a line of credit being frozen. If you are unable to borrow from it, the bank makes less money. It sounds like you are worried about nothing. The good news is, you have less debt now. 

Yes, some credit lines can be frozen and or called due and paid in full. You need to read your loan docs. Many people found this out the hard way in 2007. If you are concerned, take out what you need for operating reserves and put it into an account in a DIFFERENT bank. You should not leave it in the same bank as they may be able to pull it back out of your account. It happens.

@Dennis Nikolaev

If you haven't tapped the equity do a cash out refinance right away so that you have cash on hand. Then you won't have to worry about your line getting frozen or closed.

Cash is king.  I'd rather have cash than less debt.

Most HELOCs have a low interest rates. To me paying a low interest rate on a HELOC is like buying insurance. I have protection against bigger risks for a nominal price.

Originally posted by @Anthony Dooley :

I have never heard of a line of credit being frozen. If you are unable to borrow from it, the bank makes less money. It sounds like you are worried about nothing. The good news is, you have less debt now. 

I don’t have any personal experience with this but @Jay Hinrichs has warned about this on many occasions.  HELOCs apparently often can (and do) get frozen/called

 

Originally posted by @Kirk R. :

I don't think the bankers can just freeze a HELOC. You should read your loan agreement. I have a HELOC. I didn't read my loan agreement. I did grab a little more out of my HELOC. But I'm pretty sure unless you miss a payment or something. The bank can't just arbitrarily freeze it. But again without reading your loan agreement......

this is not correct .. Most and i would say 99% of true HELOC's give the lender the unilateral authority to stop any further advances on the line and to call it.. would be rare they actually froze it and foreclosed.. but freezing it sure this happened en Mass during the GFC.. and the main issue is you dont know it until you try to access it.. the letter saying its frozen shows up about 30 days later :(