Q on Equity line

[irfanr...@gmail.com]

Q on Equity line
*****************************

We have a rental property ( townhome) that is fully paid up.
It has been continually rented for many years.

I would like to get an equity line- just in case the situation arises
where we need cash.
I called Schwab and they indicated that they do not have equity lines
on "rental property".

Can anyone please let me know which banks / institutions offer such
lines of equity on "rental properties"?
and if so are there any pointers ie do's and dont's.

The property is in the SF, Bay Area, CA.

Thanks in advance,

Irfan Roberts

[John A. Weeks III]

In article
<e1cde600-6467-4451...@g1g2000pra.googlegroups.com>,
irfanr...@gmail.com wrote:

> I would like to get an equity line- just in case the situation arises
> where we need cash.
> I called Schwab and they indicated that they do not have equity lines
> on "rental property".
>
> Can anyone please let me know which banks / institutions offer such
> lines of equity on "rental properties"?
> and if so are there any pointers ie do's and dont's.

Any traditional bank and most commercial mortgage lenders will
do H/E loans and lines of credit on rental property. The rates
are typically a point or two higher in income property, but
right now, that should still be pretty low.

Keep in mind that a line of credit might not do what you want.
In order to get large sums of money from a line of credit, you
sometimes have to get approval from the lender. If your
situation takes a turn for the south, and you need to get this
money, the lender can say no. There is also the risk that the
lender will simply cancel the line of credit just when you need
it the most. The the solution is to take the money now and
invest it in some fixed income vehicle. It will cost you if
your return is less than the loan interest, but it is a sure
thing since you have the cash in hand already.

-john-

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