Engineer/Investor · Suches GA · Member since 2011 · 69 posts · 49 votes
Does anyone have experience obtaining Home Equity loans accross a portfolio of rental properties? Do lenders do this? Let me be clear, I am not asking information on a lender becuase they will delete me. I am justing generically what type of lenders do this this and how does it work...do they place liens against all properties involved?
Chris Licavoli I don't have personal expeirence but do know a local SFR investor who does have a busines LOC just like Paul Cordero suggested. I would think you could get a LOC based on the properties that are free and clear from a local bank. I also would not lose those loans you have at a great rate.
Local banks might be willing to do this. I had a local bank that I came "this" close to doing exactly what you described above. And, believe it or not, it wasn't even my idea - it was the banker's.
I was really just wanting to see if they'd refi one sfh into a commercial loan since I'm running near my conventional limit and wanted to save those spots.
Instead, he wanted to do a blanket loan on a bunch of my existing properties and use the extra equity (above the 70%) to create a LOC that could be used to purchase additional properties. And after I bought it and fixed it up, they were going to refi those into the blanket again to free up my LOC.
It sounded too good to be true. But he ran it by his VP and everything looked good. They ran all the numbers, had all the documentation and got an initial approval from underwriting.
Then when it went for final approval with the bank's lending committee, there was one VP that shot it down. Said the bank just got thru clearing off the last of their bad investor loans and he didn't want them to get back into this vertical right now.
So, yes, it is definitely possible. But you have to find a local bank or some other type of commercial lender with a progressive view of real estate investors. The LOC might be an issue. But at the very least, you should be able to pull some cash out if you can find a bank willing to do a blanket loan on your properties AND if you have some additional equity to pull out of them on top of the traditional 70% LTV.
Thanks for the replies. The portfolio consists of 8 properties...4 with mortgages, 4 free and clear. The ones with mortgages have long term fixed rate "gubument" backed loans. These are precious to me and I dont want to give them up for a more expensive commerical loan unless I am up against the 10 loan limit and I am not there yet.
Chris Licavoli I don't have personal expeirence but do know a local SFR investor who does have a busines LOC just like Paul Cordero suggested. I would think you could get a LOC based on the properties that are free and clear from a local bank. I also would not lose those loans you have at a great rate.
@Dennis Tierney I have 3 rental properties sitting free and clear. Tried to get HELOC on one to consolidate debt. Bank turned me down do to, "income to debt ratio." high ccard debt. how can I get from one end to the other to consolidate debt. Right now, I am drowning in 20% interest.
If you qualify, you can get 0% for up to 18 months with Alliant Credit Union. Most cards have a transfer fee, so you'll be paying around 3% interest total for 12 or 18 months.
I was looking for info on other peoples heloc experience and came across your post. FYI if you are still looking at this type of thing, I have a commercial Heloc against 3 of my properties and they have a lien against them but since it's a commercial HELOC, no debt to equity requirements as I have 8 places and can no longer qualify even though I have high income from properties. Hope this may be helpful
I was able to get a HELOC on a rental home that I owned clear and free. I could get 70% LTV on it. I used a local bank. I do have good rental income and regular income from my job but my Debt to income ratio is high due to the mortgages and student loans. I had no difficulty getting the HELOC though.
If you qualify, you can get 0% for up to 18 months with Alliant Credit Union. Most cards have a transfer fee, so you'll be paying around 3% interest total for 12 or 18 months.
3 full discount points for an 18 month i/o ARM, in traditional mortgage speak. :P
I was looking for info on other peoples heloc experience and came across your post. FYI if you are still looking at this type of thing, I have a commercial Heloc against 3 of my properties and they have a lien against them but since it's a commercial HELOC, no debt to equity requirements as I have 8 places and can no longer qualify even though I have high income from properties. Hope this may be helpful
This is with Bremer Bank which is a Minnesota based bank but am starting the process with US Bank as they hold two of my investment property mortgages and will do a commercial since they are the 1st on them.
Most lenders will want to be in a first mortgage position to put a line of credit in place on investment property. A small to medium sized local bank is always a good source to try first. I think it is important for investors to form a relationship with a lender who understands their business model and can help them as they grow their real estate portfolio. If you spot an opportunity it is always easier to move fast if you have a goodknowledgeable lender in your corner. It is nice to save a few basis points here and there but it is even more important to be able to seize on a good opportunity where you can make real money and have confidence that your lender can perform for you when you need them.
Trevor from Dayton. I am in Dayton as well I will be happy to introduce you to lending sources for solutions.
In addition to that I am willing to look at other deals for small to large projects.