Transferred My Rental To My LLC - How Do I go about getting an Heloc?

Question

Hello guys,

I just transferred one of my property to my LLC. There were a few things I noticed, it was much harder to insure, my insurance went sky high. Plus, with everything that is going on right now a lot of banks are not doing Heloc on commercia property. Is there anyone that can provide me with some advice on how to handle this please?

Ned Carey · Answer

@Dylan Fils yes financing and insurance will be higher for properties owned by an LLC. That is one of the costs of doing business.

One issue with HELOCs may simply be terminology. You can't possibly get a HELOC on aninvestment property. A HELOC is a Home Equity Line Of Credit. An investment prtoperty is not your HOME.  As silly as it sounds some bankers may tell you you can't get one, even though the bank offers credit lines on investment property - they just don't call it a HELOC.

Ask for a business line of credit secured by real estate NOT a HELOC. That may help.

Hamlet J. · Answer

Hi @Dylan Fils,

I agree with @Ned Carey. You cannot use a Heloc on your LLC investment property. However, you can use your house HELOC and write yourself a check and use that money for another property. Just be mindful that if the investment goes south, you might jeopardize your primary residence. Therefore, be careful with this strategy. Make sure that the cash flow can pay the HELOC back.

Hamlet

M and J Cooke properties, LLC

Bill B. · Answer

Because some guru told him to, or worse.

Just another downside to LLC vs an umbrella insurance policy. More complications and more expenses for no reason. It doesn’t help with taxes, it obviously doesn’t help with debt/getting more properties. Assuming you’re involved with decisions at the property it probably doesn’t help with liability, or obviously help at all if you are the cause of the loss. Heck, it doesn’t even really help with hiding your identity any more, the reason “experts” used to push them.

Try to switch it back in to your name.

Chris Seveney · Answer

@Dylan Fils

Why did you transfer to your LLC. Probably better off keeping it in your name

David Taylor · Answer

A closed end 2nd TD might work, depending on income qualification method. Can you prove income with tax returns or bank statements?

Frank Patalano · Answer

Good luck getting a HELOC on an LLC. 95% of lenders are an automatic No.

Steven Goldman · Answer

Dylan, most lenders and banks  will not  HELOC a commercial property. Vacation homes, second homes in your own name no problem. I suggest refinancing. Some banks are still at 5.60 for 10-20years, 75 percent LTV on cash outs. Good luck.

Transferred My Rental To My LLC - How Do I go about getting an Heloc?

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