Oct 13, 2026 · 47 min
Pat Grace replaces mortgages with reusable credit
$65 Million in Rentals and Not One Mortgage | Pat Grace
The strategy promises faster access to equity, but its benefits depend on cash flow, discipline, interest-rate tolerance, and careful financial structures.
- 1Lines of credit keep equity accessible while rental income reduces interest and capital remains available for future draws.
- 2The approach suits disciplined borrowers with positive cash flow, equity, and tolerance for changing rates—not every property investor.
- 3Multiple banks, entities, and accounts help Grace route income and expenses while supporting acquisitions, renovations, and operations.
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Pat Grace recounts using a commercial property to secure a $750,000 line of credit, repay it with rental income, and reuse the capital for additional properties.
The brief
Pat Grace explains how he built a $65 million rental portfolio without traditional mortgages, using lines of credit to keep equity accessible for future investments.
The argument against conventional mortgages is structural: front-loaded interest and delayed refinancing can trap equity, while a line of credit lets cash flow reduce interest and capital remain redrawable.
Grace’s system is not a shortcut for cash-strapped borrowers; it requires positive cash flow, available equity, spending discipline, and comfort with changing interest rates.
He describes multiple credit lines across banks and separate property entities, routing rental income and expenses through the right accounts to support ongoing operations and acquisitions.
The clearest case study involves a commercial property that secured a $750,000 line of credit, whose rental income repaid the balance before the capital was reused for more properties.
The episode’s takeaway is flexibility with conditions: the Burlock method can make equity more usable, but only when banking structures and borrower behavior are tightly managed.