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HOW TO USE A LINE OF CREDIT TO ACQUIRE INVESTMENT PROPERTIES-2024 | The Mortgage Patriot
Patrick Kevin Fagan explains how to use a home equity line of credit to acquire investment properties: how the line works, why cash buyers win, and how one HELOC gets reused to buy properties every few years. He walks through real numbers, off-market and wholesale deal access, and the Texas home-equity rules investors need to know before they draw. If you are thinking about buying rentals with a line of credit, this video is your roadmap.
What You Will Learn
A home equity line of credit is one of the most powerful financing tools an investor can put in their toolbox, and in this video Patrick shows exactly how to use one to acquire rental properties. You will see how a line of credit turns you into a cash buyer, why wholesalers only work with cash, and how one line gets reused to buy a property every few years.
Patrick also walks through the Texas home-equity rules that apply in 2026, so you understand the guardrails before you draw. Whether you are building a rental portfolio in San Antonio, Bulverde, or the Texas Hill Country, this video explains the strategy with the numbers laid out in plain English.
Key Takeaways
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A HELOC Is a Reusable Line of Credit
Think of it like a giant credit card secured by real estate: draw on it when a deal appears, pay it down, and the credit becomes available again for the next purchase.
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Cash Buyers Win Deals
With a line of credit you can close in days instead of waiting 30 plus days for a loan, and sellers will often accept a lower price for that speed and certainty.
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Access to Off-Market Wholesale Deals
Wholesalers bring properties that never hit the MLS, and they usually only work with cash purchasers. A HELOC gets you a seat at that table.
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Interest Only on What You Draw
A $260,000 line does not charge interest on the full limit. Draw $200,000 and interest follows the draw, dropping as you pay the balance down.
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The Property-Every-Three-Years Strategy
Patrick walks the worked example: buy a $200,000 rental with the line, pay it down with rent and cash flow, then reuse the line for the next property in the sequence.
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Know the Texas Home-Equity Rules
Texas caps home-equity debt at 80% combined loan-to-value, allows one equity loan at a time, requires a 12-day waiting period, and caps lender fees near 2%.
Companion Article
This video pairs with Patrick's complete written guide that walks through the mechanics, the worked example, and the Texas rules with every number laid out. Read the full guide: using a line of credit to acquire investment properties and see the strategy from setting up the line to buying the fourth rental.
Read Patrick's Complete BreakdownContinue Learning
Not sure a HELOC is the right tool? Patrick explains the difference between a HELOC and a home equity loan, including rates, draw periods, and when each makes sense.
Want to see how lenders underwrite rentals? Financing a rental property covers investment loan requirements, down payments, and the credit standards that apply.
Exploring your options? Patrick compares the best loans for real estate investors, from conventional investor loans to DSCR and portfolio products, so you can pick the one that fits your plan.
Have Questions About Using a Line of Credit for Investment Properties?
Patrick is a dual-licensed Loan Officer and REALTOR who works with investors and first-time buyers every day. He can help you structure the line, the offer, and the financing together so your plan actually closes.
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