HELOC's when owning more than 4 properties?

Question

I currently own 7 investment properties (13 doors), all with conventional mortgages, and I planned to open a HELOC on one of them to use for more down payments. When I called PenFed they said they couldn't give me a HELOC because I have more than 4 total properties and said it is a Fannie/Freddie restriction. I never heard of that. What type of lender should I contact to get a HELOC on one of these investment properties in NY?

Also, any lender recommendations that would open a HELOC on my whole portfolio? I own small multi-families in NY, PA, and OH, if it matters.

Just looking for best options to tap into my nearly $500k of equity across all of these properties. Thanks for any help!

Austin F. · Answer

I just did this with a local bank. It is a business LOC opened by my LLC (which doesn't do much so this isn't a roadblock) secured with seconds on my rentals. The same local bank holds the first positions too.

The other locals I called were hesitant to put a second on without also holding the firsts. So best bet is to call the (hopefully) local lender and see what they can do. You could possibly refi everything into a bank that is willing to play ball, you have some leverage with that many properties.

They also bumped me up from 70% LTV to 80% on the line which everyone says can't be done, so always worth a talk with the local folks, never know what you may find.

Malcomb Stapel · Answer

@Anthony King  local lenders tend to be more flexible in my experience. The bigger banks are a bit too bureaucratic and inflexible. You might shop around, always be very upfront with what you are trying to accomplish.

I'd also be hesitant about walking into the bank and telling them how I want something done. You may pigeon hole them into a single train of thought. Much better to keep it broad, like, "I want to tap the equity in these assets so that I can purchase more of them," what are my options?