HELOC on an Investment Property

Cape Cod, Massachusetts
General Real Estate Investing
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HELOC on an Investment Property

Marissa Gallant
Member since 2024 · 1 post · 4 votes

Hello, 

I am new to this space but was looking for some advice on obtaining a HELOC on a home that I am currently renting out. I own the home but I do not live there as my primary residence. I live with my parents and still have a mortgage on the home.

I am quickly learning that many banks do not give HELOCs to rental properties. I have called a couple of local banks, including the one that my mortgage is through, as well as larger banks like Bank of America and Rocket Mortgage.  None offer HELOCs on rental properties that still have a mortgage.

There is nothing I want to purchase right now and I will have tenants in the home at least until the end of this year. I still wanted to pursue a HELOC in case any opportunities came up in the future. I was wondering if anyone would be able to give advice on if there was a chance of getting a HELOC in my current situation. Does anyone know of any lenders or programs that might be open to a HELOC on a rental property? Any advice would be greatly appreciated, thanks so much!

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  • Benjamin AakerPro Member
    Rental Property Investor · Brandon, SD · Member since 2015 · 1k+ posts · 1k+ votes
    2y

    Does the rental house have a mortgage? Talk to the commercial lender at that bank. Often the problem is the issue of liens. The primary mortgage is the first lien. If you fail to pay your mortgage, the first lien can get control of the property or recoup money from the loan guarantor - probably you. Other lien positions get what is left. That's a huge risk. But, if the same bank holds both first and second lien, it's less of an issue.

    If your property doesn't have a mortgage, you can either get one or get a commercial line of credit. Talk to a commercial banker. 

    0Reply
  • Brittany MinocchiBusiness Member
    Lender · Massillon, OH · Member since 2022 · 1k+ posts · 486 votes
    2y

    There are lenders that will do HELOCs on investment properties, but the rates are not good. You may have better luck with a cash out refinance, which would allow you to pull equity from the property by replacing the existing mortgage with a new one. Happy to discuss further if you want to reach out! 

    [email protected]330-354-6590
    Brittany Minocchi - Barrett Financial Group, LLC522 Reviews
    View Page
    0Reply
  • Jon K.
    Rental Property Investor · Perry Hall, MD · Member since 2016 · 586 posts · 598 votes
    2y

    TD Bank used to do a HELOC in second position on investment properties if they were titled in your personal name. Not sure if they still do but it's worth looking into.

    0Reply
  • John Gallagher
    Member since 2021 · 3 posts · 1 vote
    1y

    Hello everyone - we're working on putting up a new area of the site called BiggerPockets Property Management Toolkit, and we've written an article on Heloc versus Home Equity Loan.

    Learn the differences between a HELOC vs a Home Equity Loan

    All feedback welcome!

    0Reply
  • Zach BossonBusiness Member
    Lender · Member since 2023 · 42 posts · 15 votes
    1y

    @Marissa Gallant

    Hi there, I wouldn't assume that a cashout refinance is a better option! 60% of homeowners have a 1st mortgage rate under 4%, refinancing that loses an asset (your low rate). That doesn't mean a HELOC is automatically a better option, you should look into both!

    We offer both HELOCs on investment properties(rare) and Cash Out refinances feel free to reach out if you'd like to learn about your options!

    [email protected]888-885-7789
    First Access Lending4.974 Reviews
    WebsiteView Page
    0Reply
  • Quinton Brown
    Lender · Seattle WA · Member since 2025 · 210 posts · 33 votes
    1y

    Our digital instant heloc is good for rental properties, single family, duplex, and condo. They just cant be owned in an LLC, but a trust is okay.. They fund in 5 days. NO underwriting fees, no appraisal fees only AVM.

     https://axenmortgageheloc.com/account/heloc/register?referrer=e9c9ab64-16c3-4361-bb8c-fd9aa2e69532

    0Reply
  • Will Cook
    Lender · Denver, CO · Member since 2017 · 16 posts · 3 votes
    1y

    Hello all,
    We offer HELOC's on a rental property:
    single family homes, duplex, triplex, fourplex.
    We also have a couple of DSCR HELOC options, it can cash flow or be just under.
    5-30 units as well but must cash flow and not mixed use or student housing.

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