I met with a commercial lender to see if I could put together a line of credit collateralized by the properties I already have. He said he could do it, but I would be refinancing my cheap 30yr mortgages into shorter 15yrs, and they would adjust every 5yrs. Not to mention the points and other costs involved.
So, thank you; but no.
What I gathered from the conversation was that I should probably get a little more equity in my primary residence, then I could secure a HELOC on that and THEN go shopping for new rentals.
The goal of all this was to get into a position where I could buy a midrange house for cash, then refi into a 30yr mortgage.
1. Find a lender that will lend me money based on the appraised value.
2. Find deals that will appraise for at least 20% more than my purchase price.
@Carter Melvin maybe Im missing something but isn't ordering an appraisal one of the first things a lender does? Did this bank use some other criteria to determine how much your property was worth and how much you could borrow? You should be able to get a 25 year loan on a commercial property.
I don't think my post was clear. I have 3 residential rental properties and my plan was to take the equity that has appreciated above my purchase price and use it to buy another residential house cash. He said a number of times that most banks would be shy to do this b/c of getting burned a few years ago, but I know Wells Fargo will do it, I just haven't talked with them yet. He also said his bank is a smaller bank (they don't do residential mortgages anymore). There are plenty of banks in the area, moving on to the next one.
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