Private Lending & Conventional Mortgage Advice

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Daniel Kokodoko
  • Oakland, CA
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HELOC on rental properties

Daniel Kokodoko
  • Oakland, CA
Posted Oct 31 2022, 15:28

Hello, we have 2 rental properties in Salt Lake City, and both have conservatively at least $200K in equity in each. We would like to open a HELOC of $100K on each. Does anyone know an investor friendly lender that would do this? Credit score, debt to income, and gross income should not be an issue. Both properties have positive cash flow (+/- $300 per month), and have 30 year fixed 3.25% loans. The lines of credit would be used to potentially fund new deals.

Thank you

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Kevin Sobilo
  • Rental Property Investor
  • Hanover Twp, PA
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Kevin Sobilo
  • Rental Property Investor
  • Hanover Twp, PA
Replied Nov 1 2022, 06:53

@Daniel Kokodoko, with a HELOC on an income property I suspect a lender would want the property to cover all the debt/expenses on the property and then some. Sounds like you only have $300 left each month and if you take a $100k HELOC out on a property and use it, that you wouldn't be generating enough to cover everything just from that property.

To access that equity, you might need to sell them and do a 1031 exchange into new properties.

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Jaron Walling
  • Rental Property Investor
  • Indianapolis, IN
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Jaron Walling
  • Rental Property Investor
  • Indianapolis, IN
Replied Nov 1 2022, 06:56

Like @Kevin Sobilo said this is a lender specific question. Securing a LOC on investment property is harder than a primary residence.

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Leo Ray#3 General Real Estate Investing Contributor
  • Investor
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Leo Ray#3 General Real Estate Investing Contributor
  • Investor
Replied Nov 1 2022, 09:13

@Daniel Kokodoko obviously, countless banks/credit unions will do a HELOC on a primary residence, but the only lender in Salt Lake City that I've found that will do a HELOC on a rental property is America First Credit Union.

...there may be others out there, but I haven't found them (if anyone knows any others, I'd be interested to hear about them).

Good luck out there!

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Daniel Kokodoko
  • Oakland, CA
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Daniel Kokodoko
  • Oakland, CA
Replied Nov 1 2022, 09:40

I will check with them and report back here. Thank you!

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Chris Potter
  • Rental Property Investor
  • Saint George, UT
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Chris Potter
  • Rental Property Investor
  • Saint George, UT
Replied Jan 6 2023, 09:03

@Daniel Kokodoko I just completed my second HELOC (Zions bank refers to them as HECLs) on a rental property. They were both with Zions bank which is a Utah/Idaho bank. They stopped doing HECLs on investment properties through COVID, but started doing them again the last 6 mo or so. It wasn't too hard to get them done, but I have really good income and very low DTI. The HECLs they do on primary residences are great because they are no fees so I did that as well. The HECLs I did on my rentals have fees involved, but definitely worth it. I think my fees with origination, appraisal, title fees were between $2500-$3500. One did a drive by appraisal which saved me about $650 and the other drive by appraisal came in so low that I requested a full appraisal which I had to pay for. My rentals have 1st mortgages at 2.875% so that's why I went with the HECLs in 2nd position since there is no way I will be refinancing those first position deeds of trust anytime soon. Another credit union that will do these is Goldenwest CU. I don't know if you have those in CA but they are in Utah. I would imagine most CUs will do them. I would shop around and look at all the fees, rates, etc. The other nice thing with Zions bank is that they gave me 6 mo promo rates at 4.5%-5% on these HECLs and then they bump up to maybe 1-2% above prime? I haven't really paid much attention to what the rates will be because I imagine most banks are pretty similar. I think these took around a couple of months each to get these done and that was with Zions already having most of my documentation from my primary residence HECL. Last thing I will mention is that Zions bank will only do 3 HECLs for one person so I'm now tapped out. I hope that helps, good luck.

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Jeet Sangha
  • Realtor
  • Gilroy, CA
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Jeet Sangha
  • Realtor
  • Gilroy, CA
Replied Jan 6 2023, 09:17
Quote from @Chris Potter:

@Daniel Kokodoko I just completed my second HELOC (Zions bank refers to them as HECLs) on a rental property. They were both with Zions bank which is a Utah/Idaho bank. They stopped doing HECLs on investment properties through COVID, but started doing them again the last 6 mo or so. It wasn't too hard to get them done, but I have really good income and very low DTI. The HECLs they do on primary residences are great because they are no fees so I did that as well. The HECLs I did on my rentals have fees involved, but definitely worth it. I think my fees with origination, appraisal, title fees were between $2500-$3500. One did a drive by appraisal which saved me about $650 and the other drive by appraisal came in so low that I requested a full appraisal which I had to pay for. My rentals have 1st mortgages at 2.875% so that's why I went with the HECLs in 2nd position since there is no way I will be refinancing those first position deeds of trust anytime soon. Another credit union that will do these is Goldenwest CU. I don't know if you have those in CA but they are in Utah. I would imagine most CUs will do them. I would shop around and look at all the fees, rates, etc. The other nice thing with Zions bank is that they gave me 6 mo promo rates at 4.5%-5% on these HECLs and then they bump up to maybe 1-2% above prime? I haven't really paid much attention to what the rates will be because I imagine most banks are pretty similar. I think these took around a couple of months each to get these done and that was with Zions already having most of my documentation from my primary residence HECL. Last thing I will mention is that Zions bank will only do 3 HECLs for one person so I'm now tapped out. I hope that helps, good luck.


 Do you know if Zions bank would do a HECL on a property in California?

Real Estate Agent CA (#02014485)

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James Leach
  • Investor
  • Phoenix Area
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James Leach
  • Investor
  • Phoenix Area
Replied Jan 6 2023, 11:01

I have done 3 HELOC's on my properties through Credit Union West here in AZ within the last year and a half. 2 of them were on investment properties and 1 on the house that previously was an investment property that I moved into to remodel. I have good credit and good DTI. The credit union provided the HELOC based on an 80% LTV. In other words, if your property appraises at $400k and your existing loan is $200k, they would provide me with a $120K loan. Depending on the value of your properties, I think you shouldn't have an issue finding the right lender for you. I've built a good relationship with this credit union and they understand my goals. I'm not sure if that was the main reason that I obtained the loans pretty easily but they knew if I didn't pay, they can foreclose on my house! They didn't ask if the rent could cover the mortgage pmt and the HELOC, they just used the equity in the property. Maybe this was specific for me, not sure... Do your research and if you know it can work, keep searching for the right lender and you'll find them hopefully adding them as a partner for future deals!

Good luck and happy hunting!

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Jonathan Taylor
  • Lender
  • Los Angeles, CA
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Jonathan Taylor
  • Lender
  • Los Angeles, CA
Replied Jan 6 2023, 16:39

@Daniel Kokodoko I have not found a lender who does HELOCs on IPs. There are lenders who do registered second mortgages on IPs. Higher rates, shorter terms (5-15 yrs ish) but those are the only products I have seen that tap in IP equity.

Lender CA (#02115256) and NMLS (#1993906)

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Kerry Baird
  • Rental Property Investor
  • Melbourne, FL
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Kerry Baird
  • Rental Property Investor
  • Melbourne, FL
Replied Jan 8 2023, 23:02

@Jonathan Taylor None of these? 

Bank of Southern California, Bank of West (BNP Paribas), Cal Coast Credit Union, East West Bank- San Fran, First Republic, Fremont Bank, Golden1, HSBC, Quorum FCU, Silvergate Bank, Umpqua, Bank of Marin.

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Peter Mckernan
  • Residential Real Estate Agent
  • Irvine, CA
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Peter Mckernan
  • Residential Real Estate Agent
  • Irvine, CA
Replied Jan 9 2023, 04:55
Quote from @Kerry Baird:

@Jonathan Taylor None of these? 

Bank of Southern California, Bank of West (BNP Paribas), Cal Coast Credit Union, East West Bank- San Fran, First Republic, Fremont Bank, Golden1, HSBC, Quorum FCU, Silvergate Bank, Umpqua, Bank of Marin.


 Santa Ana Credit Union, there are some more as well! 

  • Real Estate Agent Ca (#01968986)

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Jonathan Taylor
  • Lender
  • Los Angeles, CA
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Jonathan Taylor
  • Lender
  • Los Angeles, CA
Replied Jan 9 2023, 10:52

@Kerry Baird Some of those banks offer HELOCs on O/O duplexes max but not true IPs (non O/O). Fremont will do Investment properties located only in CA but max CLTV of 60% (last time I spoke to a rep in Oct 2022 was 60%). So not a lot of owners fit into that box. If you speak to them and I am wrong please post the specifics.

Lender CA (#02115256) and NMLS (#1993906)

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Chris Potter
  • Rental Property Investor
  • Saint George, UT
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Chris Potter
  • Rental Property Investor
  • Saint George, UT
Replied Jan 10 2023, 13:56
Quote from @Jeet Sangha:
Quote from @Chris Potter:

@Daniel Kokodoko I just completed my second HELOC (Zions bank refers to them as HECLs) on a rental property. They were both with Zions bank which is a Utah/Idaho bank. They stopped doing HECLs on investment properties through COVID, but started doing them again the last 6 mo or so. It wasn't too hard to get them done, but I have really good income and very low DTI. The HECLs they do on primary residences are great because they are no fees so I did that as well. The HECLs I did on my rentals have fees involved, but definitely worth it. I think my fees with origination, appraisal, title fees were between $2500-$3500. One did a drive by appraisal which saved me about $650 and the other drive by appraisal came in so low that I requested a full appraisal which I had to pay for. My rentals have 1st mortgages at 2.875% so that's why I went with the HECLs in 2nd position since there is no way I will be refinancing those first position deeds of trust anytime soon. Another credit union that will do these is Goldenwest CU. I don't know if you have those in CA but they are in Utah. I would imagine most CUs will do them. I would shop around and look at all the fees, rates, etc. The other nice thing with Zions bank is that they gave me 6 mo promo rates at 4.5%-5% on these HECLs and then they bump up to maybe 1-2% above prime? I haven't really paid much attention to what the rates will be because I imagine most banks are pretty similar. I think these took around a couple of months each to get these done and that was with Zions already having most of my documentation from my primary residence HECL. Last thing I will mention is that Zions bank will only do 3 HECLs for one person so I'm now tapped out. I hope that helps, good luck.


 Do you know if Zions bank would do a HECL on a property in California?

 @Jeet Sangha, I don't know if Zions bank will do HELOCs on properties in CA you would have to call them....my properties were all in Utah 

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Daniel Kokodoko
  • Oakland, CA
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Daniel Kokodoko
  • Oakland, CA
Replied Jan 10 2023, 21:34

Thanks everyone for your input. The properties are located in Salt Lake City. I'm planning on reaching to Zions Bank in the next few days. I will post back here to let everyone know how it went.

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Trino Martinez
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Trino Martinez
Replied Jan 30 2023, 20:27
Quote from @Daniel Kokodoko:

Hello, we have 2 rental properties in Salt Lake City, and both have conservatively at least $200K in equity in each. We would like to open a HELOC of $100K on each. Does anyone know an investor friendly lender that would do this? Credit score, debt to income, and gross income should not be an issue. Both properties have positive cash flow (+/- $300 per month), and have 30 year fixed 3.25% loans. The lines of credit would be used to potentially fund new deals.

Thank you

@Daniel Kokodoko the last time I shopped a HELOC one of my two SFH in SLC, Mountain America CU and Zions Bank both offered favorable terms on an investment property. Being CA based, the nice thing was they had affiliate banks where the HELOC doc could be signed without having to travel back to SLC. The furthest I'd have to travel was Reno to an affiliate/branch. Good luck!