Using a Line of Credit Instead of Selling Stock to Buy Real Estate: A Smart Wealth Strategy for High-Earning Buyers

For high-net-worth individuals, tech employees, and business owners, buying real estate isn't just about finding the right property—it's about making the right financial move. And in today’s market, one of the smartest strategies available is using a securities-backed line of credit (SBLOC) or business line of credit to fund a home purchase without selling stock.

This approach allows you to preserve your investments, avoid triggering taxes, and maintain long-term growth potential—while still gaining access to the liquidity you need to buy a home.

Here’s how it works, when to use it, and why it’s gaining popularity among sophisticated real estate buyers.

Why Not Just Sell the Stock?

For buyers with large equity portfolios—whether from RSUs, long-term investments, or business ownership—selling stock may seem like the easiest way to free up cash. But it comes at a cost:

• Capital gains taxes can take a significant bite out of your proceeds
• You lose potential future appreciation and dividend income
• Selling in a down market means locking in losses
• You may miss eligibility for long-term capital gains if you sell too soon
  
  

In short, selling stock to fund a home purchase could shrink your portfolio and slow your wealth-building momentum.

The Alternative: A Line of Credit Secured by Your Assets

A Securities-Backed Line of Credit (SBLOC) allows you to borrow against your stock portfolio—without selling your investments. Think of it as a flexible, low-interest loan backed by your existing brokerage account.

If you own a business, a business line of credit can also be used strategically to provide liquidity for real estate—especially if you have strong recurring revenue.

Key features:

• Interest-only monthly payments
• No need to liquidate shares
• Fast access to capital (often within days)
• Typically lower interest rates than unsecured loans or credit cards
• No impact on your investment strategy
  
  

Real-World Use Case: Buying a Home in LA Without Liquidating

Let’s say you have $2M in a tech stock portfolio or private company shares that vest monthly. You want to buy a $2.5M home, but you don’t want to trigger taxes by selling stock now.

Instead of liquidating, you:

1. Open a line of credit with your financial institution or a private lender using your portfolio as collateral
2. Borrow funds for the down payment (or the full purchase if you’re going all-cash)
3. Repay the loan gradually—or all at once after a liquidity event—without disturbing your investment base
   
   

This strategy is especially effective for:

• Tech employees at companies like SpaceX, Google, or Snap
• Business owners with high cash flow but inconsistent take-home income
• Investors with long-term equity they don’t want to sell prematurely
  
  

Benefits of This Strategy

Considerations and Risks

• Your portfolio can be subject to margin calls if the value drops significantly
• Interest rates may fluctuate, depending on your lender
• Not all brokerages or lenders offer SBLOCs—work with one that understands your goals
• You should have a clear repayment plan and backup liquidity strategy