Who is a Line of credit lender

Question

Hey guys I’ve been searching for a lender to for a line of credit for a rental property I own out right.

I was working with a local bank and service has really fallen off.  With that I’m searching for a lender that does loc for rentals.

Has anyone had a good personal experience with a lender? Any recommendations as to who does line of credits?

Andrew Postell · Answer

@Jason Smith thanks for posting!  Always great to hear from a fellow Texan.  So the question you are asking has a very difficult answer for us here in Texas - most lenders that offer these products won't offer them here in Texas. Usually when I field this answer out in the general forums it about finding this in ANY state so I'll answer it for Texas first and for everyone else just in case it get's researched.

1. Texas - Cash out loans of any type are pretty challenging here in Texas.  Because of this many lenders won't do these loans at all.  Finding a lender that does investment property "Lines of Credit" is hard in any state...but here it's even harder.  I know 3 that write them locally in DFW...and only one of those will do it state wide.  But am certainly willing to share any information if you just PM me.  No problem.

2. For everyone else....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. Here's my 2 suggestions:

• 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. Even facebook will have some.       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.

Now, please understand that I'm not saying that this product is the best thing for you to do - there are certainly pros and cons to everything - but if you want this specific product on an investment property here in Texas then that's the information you need to know.  Thanks!

Jason Smith · Answer

@Andrew Postell

Very informative and spot on with what I have found.  Thank you, I will reach out via PM

Andrew Garcia · Answer

Hi @Jason Smith, someone made a list HERE.

The list is somewhat dated and some of them no longer offer them but if you call around, you should find someone that can do it for you.

Hope this helps! Let me know if I can be of any assistance.