Need Help in Finding HELOC options

[Hector Daniel Garcia]

Hello Investors,

I am trying to find a lender who is willing to do a HELOC. It seems that this product is not currently being offered. Any leads are highly welcomed. Anyone have any good HELOC options? Thanks in advance!

[Alex Breshears]

Hi Hector! You are correct many lenders have pulled back from this product - especially in CA - as lenders are trying to insulate themselves from market devaluation that may be possible. For the property you want to obtain a HELOC - is this going to be your primary residence or an investment property? What state is the property in?

[Hector Daniel Garcia]

@Alex Breshears the home I am considering doing a HELOC is currently an investment property in Gilroy California. It has been a rental since May 2021. It was my primary home for 6 years prior to converting it to an investment property. I now have good amount of equity I would like to access to use towards my next project/investment property. What are your thoughts? Thanks in advance for your reply.

[Erik Estrada]

Quote from @Hector Daniel Garcia:

@Alex Breshears the home I am considering doing a HELOC is currently an investment property in Gilroy California. It has been a rental since May 2021. It was my primary home for 6 years prior to converting it to an investment property. I now have good amount of equity I would like to access to use towards my next project/investment property. What are your thoughts? Thanks in advance for your reply.

 Hey Hector, 

I haven't found any lender that is willing to do a HELOC on an investment property. Most do it for primary residences. I am assuming you have a low rate and do not want to touch it. You are facing a tough decision that many other investors are also facing.

[Alex Breshears]

Quote from @Hector Daniel Garcia:

@Alex Breshears the home I am considering doing a HELOC is currently an investment property in Gilroy California. It has been a rental since May 2021. It was my primary home for 6 years prior to converting it to an investment property. I now have good amount of equity I would like to access to use towards my next project/investment property. What are your thoughts? Thanks in advance for your reply.

Hi Hector! Right now the lending space is basically in full lockdown mode as lenders try to figure out what the risks are currently and in the future.  Lenders that had HELOC products for investment properties have ended those programs or put them on pause.  I can recommend trying to reach out to local community banks in the area. (P.S. Love gilroy! We did the garlic festival there and the Garlic Ice Cream was AMAZING).  If you reach out to the community banks just let them know it is investment property.  The other thing to realize is that you are likely going to be tapped out at 80% max LTV between your first and second lien - so while the equity might be substantial in dollar terms, the lenders are going to look at this in percentage of value of the asset.  If you have a decent idea of what it would conservatively appraise for, take about 80% of that, and then subtract your first mortgage balance. That would be what you had available to tap into.  Depending on what that number is - it may or may not be worth the hassle or the cost to get the HELOC in the first place. With the lower value loans it sometimes doesn't make sense to spend $6k on closing costs to access a $20k HELOC for example.

[Jeet Sangha]

Hello Hector, 

I use a lender out of Hollister. They've done HELOC's on investment properties.
I will reach out to them and let you know.

[David M Venkat]

Bank of America is one among the very few major banks that are doing HELOC now. They are heavily backlogged and the current wait time is about 3 months.