UN Blog: How to borrow against the investment properties I own? and 2013-05-16 Russell Investments Center

Saturday, August 3, 2013

How to borrow against the investment properties I own? and 2013-05-16 Russell Investments Center

How to borrow against the investment properties I own?

I own rental properties and they do not have any mortgage right now. What is the best way to borrow against the investment properties for purchases of additional units? I believe home equity line of credit may not be an option because they are not my primary residence.

Thanks

I am not plan to sell the existing properties or the newly acquiring properties. I want to rent them and earn the cashflow.

Do you think forming a Trust for my properties and borrowing against the Trust is an option. My Real Estate agent mentioned something along those lines.

Investment best answer:

Answer by WhatistheROI
The answer is: You don't.

You either:
1. Borrow money from a private lender or hard money lender up to 70% LTV for your next property
2. Borrow money from a bank. I don't recommend this.
3. Sell the property you own to buy better property or fix up the property to sell it at a higher price
4. Use the cash flow from the all equity property to buy new property by using the cash flow to pay for the down payment
5. Use a traditional subject to and a note to secure new property form a desperate seller who trust you
6. Wholesale
7. Owner finance the property you own to receive cash flow for life (this is used best for mobile and residential homes)

The whole point is that you have to know your exit strategy with the next property you're buying before you do anything with your current assets. It's great that you own your investment property free and clear, but now you need to make more cash flow so make a decision and stick with it. I'm only 21 and I know this.

By the way, you can do a 1031 exchange as well but make sure you do it within your states codes and regulations.

The biggest message I can send you is: Do something now! Compounding interest won't wait for me to get property right? Well it won't wait for you either if you don't do something now!

Go get em!