What To Do
I am still a beginner investor with 6 rental properties. I am now at the point where I would like to start expanding but am having trouble with the lending side of things due to conventional guidelines. I have about $140,000.00 in equity on these rentals and feel like I need to utilize that to aquire other properties. They are all on separate loans with decent rates. What is the best way to utilize this equity if thats the way I need to go. Any ideas are greatly appreciated. Thank you, Steve.
Steve,
The bad news is the total amount of equity is not as interesting as the LTV for each property. A lender does not want to lend against the last little bit of equity.
Also the cash flow becomes important. When you get higher LTV deals they will normally look more closely at the cash flow.
So, it might not be possible to pull out all the equity.
If that is the case...
Look at ways to do deals without equity or cash. Then you can use your equity (creating a private note) as a sweetener when needed.
[addsig]
The LTV on these properties is between 70-75%. I was thinking of maybe putting a commercial loan on all of them, then getting an equity line of credit around $100,000 or so to use on other properties. Then I would refinance those to pay back the equity line. What are your thoughts on this? Is it even possible or feasible?