Should I roll current Primary MOrtgage into HELOC?

Question

SO!!my SFH rental likely has a solid $50K+ Available in equity...

( $100K+ value / 28K owed @ 2.75% / assume 80% LtV)

I cannot find  a lender that will do a HELOC on an investment property.. I'd like a HELOC as a psuedo emergency fund  and/or to  help with a larger DP on future properties

I have the $28K in cash but it's my D.P. account for my next property.

one  Idea is to  Pull a $80K HELOC... and toss my cash at it

( or more than likely pay off the primary, then refi the paid off home with  a HELOC)

Thus giving me the entire $80K as a credit line....

if i pull... $40K out for a duplex  DP  I could likely replenish in < 12 months (if the property doesnt need further funds)

Thoughts?

Dave Skow · Answer

if this  100K  property is  your primary home  -  you should be able to find a lender  will  to go to a  80-90% cltv  ...assuming  an  80%  ltv - thats  80K for  aggregate  total of   1st  mtg and heloc  ...so that means  a  new  heloc  of  approx  52K  ...you are  right most lenders  will not do helocs  on rentals

Andrew Postell · Answer

@Robert Brown a small, local lender will be your HIGHEST probability of success when trying to find "Line of Credit" lenders on investment properties. The unfortunate thing here is that investment properties foreclose at a higher rate than primary homes so many banks just don't want the exposure to this. But it is 100% possible to find but you have to put in the time or at least know someone that ALREADY has the connection.

• Visit your      local REI groups. There are many groups that meet across the      country. Some post here on the Bigger Pockets Marketplace. Many post on      meetup.com. Networking is always a great practice and you never know who      you might meet there and what good information they have to share. Would      certainly recommend visiting if one is close to you.
• Calling - and then      there's this option. Which is what I had to do. I had to call about 200      lenders (no exaggeration) to learn of 4 lenders who did this and I have      some tips. First, when calling banks target the smallest most community      based banks you can first. If you have never heard of them, and they have      one location - that's a good candidate. No big, national, publicly traded      banks will do this loan type. Second, try to ask for "LINES OF CREDIT"      instead of "HELOC". I know it sounds like I'm splitting hairs      but some banks write HELOCs in their residential department....which won't      write Investment Properties. And that residential department will      often not speak to the commercial      department. So they'll just say "sorry, we don't do it"....not      even knowing that they really do! So if you ask for a "line of credit      on an investment property" that should get you to the COMMERCIAL      division. That's the section of the bank we want. Now, most of these smaller      banks may only have 12 employees or so. So don't get frustrated if they      don't return your call or aren't in the office. Just call back and be      friendly. Maybe play dumb a little "I don't know if I'm in the right      place..." "I'm sorry to disturb you, you may not be the right      person for this....", etc. Maybe someone can get you to the right      person. Again, be prepared to call A LOT

Hope this helps.

Andrew Friberg · Answer

You have clearly done the math, so if it is permission you need then I say go for it. I would say as long as you can still cashflow, then it would not hurt to pull out a HELOC. so use the equity as long as the math still works and you aren't over leveraging.