Hi, I'm in a situation that I have a rental unit and am looking at buying others now. I do not have cash on hand but I do have over 100 K in equity. Is there any way that I can turn that into purchase power on other units. Thanks Chet.

You mention the equity, but you did not mention the market value of the existing rental property. The devil is in the detail as $100,000 worth of equity might not be accessible if the property where you have the equity has a $400,000 loan.

If that is not the case, you can do some quick math to find out how much of those $100,000 are available by taking the market value of the existing property and multiplying it by 20% {the result is how much equity must remain and is not accessible}.

If indeed there is some accessible equity there, then it is just a matter of timing the purchase and the refinancing together in one closing.

Let me run through an example

If the market value of the property is $200,000 then you can probably count on being able to use $60,000 of that equity to finance the acquisition.

You might also want to set it up as two distinct facilities so that you don’t have to worry about a partial release of collateral later in case that you sell one of them.