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LOC draw down strategy
The Investors Club, henry Kaye and others promote a strategy whereby you periodically get your investment properties revalued, then extend your line of credit to 80% of the value and then draw down this extra equity to use as tax free money to live on.
The idea is to do one property every year, so if you had 7 properties your get them revalued one property per year for 7 years. ie each property will be valued once every 7 years.
You can then live happily without working using this equity to fund your lifestyle.
What I want to know is would a bank extend your LOC like this if you weren't working? Wouldn't they be worried that your debt was increasing every year? (theoretically your properties would be increasing faster than your debt.) Is anyone using this method?
Thanks
PI
LOC draw down strategy
The Investors Club, henry Kaye and others promote a strategy whereby you periodically get your investment properties revalued, then extend your line of credit to 80% of the value and then draw down this extra equity to use as tax free money to live on.
The idea is to do one property every year, so if you had 7 properties your get them revalued one property per year for 7 years. ie each property will be valued once every 7 years.
You can then live happily without working using this equity to fund your lifestyle.
What I want to know is would a bank extend your LOC like this if you weren't working? Wouldn't they be worried that your debt was increasing every year? (theoretically your properties would be increasing faster than your debt.) Is anyone using this method?
Thanks
PI
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