What is Equity Stripping?
In it’s simplest form, it simply means that you remove (strip) the equity from some property that you own by encumbering it with the maximum possible debt. For example, if you live in a state that does not have any substantial homestead protection (and other asset protection methods are not available), you could take out a loan secured by the home equity. Where I live, some mortgage lenders are offering to loan home owners up to 125% of the equity in their home. Of course, the interest rate is very unattractive, but it can be done. I suspect the same kind of deals are available where you live. However, if you want more reasonable home equity or real estate loan rates, you will most likely be limited to loans equal to about 75% of the equity in the property. (You may be able to do better with a “sweetheart loan” as described later.) If you own some rental real estate that you inherited from your parents it’s most likely debt free. Debt free income producing property would be very appeal
