2nd Mortgage Options on an Investment Property

Virginia Beach, Virginia
Private Lending & Conventional Mortgage Advice
3yFollow

2nd Mortgage Options on an Investment Property

Jonathan Goldman
Real Estate Broker · Virginia Beach, VA · Member since 2019 · 8 posts · 4 votes

I wanted to see if anyone knew of a lender that does a 2nd mortgage on an investment property? 


Any recommendations are welcomed! Trying to think through how to access more of the equity in this property and redeploy into more opportunities.

My current loan structure is:


First mortgage OLB is around $347k at 2.75% 

HELOC is at $382k prime plus 3% (currently has a 12 month rolling cap so I'm just now shooting up to 9.5% this month but will be at 10.5% before I know it.)

The current valuation is $1.5-1.6M. 
The current use is a beach house vacation rental with about $140k annual gross bookings in Virginia Beach. 

1) I don’t want to lose the 2.75% rate IF there’s a creative way to tap into the extra equity. (Maybe there’s not?)

2) I would be okay if I could do a standard cash out refi at 5.5-6% and just have one $1M mortgage on a 30 year term Because it would still Cash flow as a STR. (But this doesn't exist right now unless someone knows where you could find this?)

3) the highest second mortgage I've found on a HELOC is $400k right now if I were to refi my HELOC into another HELOC.

Thoughts?

1Reply
42 views

Most Popular Reply

Dennis Muno
Lender · Denton, TX · Member since 2023 · 349 posts · 80 votes
3y

I would recommend you contact a mortgage broker in your locality. They will be able to shop multiple banks and lenders and provide you with multiple finance bids. I think you can start there

1Reply
See this reply in the discussion

5 Replies

Jump to latestLatest
  • Patti RobertsonBusiness Member
    Property Manager · Virginia Beach, VA · Member since 2016 · 2k+ posts · 2k+ votes
    3y

    How strong are your debt to income, assets, and liquidity?  If they are strong, Towne is lending for investment property. They just gave me a loan for a flip purchase with just a personal guarantee and not even a loan application. They do have our current financials and we have our deposit accounts and a long history with them.  Local banks are your best options right now, but they all want cash deposits.

    757-472-2547
    1Reply
  • Dennis Muno
    Lender · Denton, TX · Member since 2023 · 349 posts · 80 votes
    3y

    I would recommend you contact a mortgage broker in your locality. They will be able to shop multiple banks and lenders and provide you with multiple finance bids. I think you can start there

    1Reply
  • Jonathan Goldman
    OP
    Real Estate Broker · Virginia Beach, VA · Member since 2019 · 8 posts · 4 votes
    3y
    Quote from @Patti Robertson:

    How strong are your debt to income, assets, and liquidity?  If they are strong, Towne is lending for investment property. They just gave me a loan for a flip purchase with just a personal guarantee and not even a loan application. They do have our current financials and we have our deposit accounts and a long history with them.  Local banks are your best options right now, but they all want cash deposits.

    Hey Patti!

    Yeah all of my accounts for my brokerage and businesses are with Towne! I tried them first, but it wasn't optimal and my banker never actually got back to me on if they had an appetite for it....

    We have a small Fix and Flip Line with them that we use, but with current rates, they're way more conservative and only funding 75% of purchase and 75% of rehab and their rates are in the 9s which is not too far off from what I'm getting with Kiavi on my Fix and Flip with a lot more red tape than Kiavi.  (Kiavi's funding 90% of the purchase and 100% of the rehab as well which is the best I've seen out there right now.)

    Towne, Old Point and Langley FCU... all aren't interested in it on a 2nd position which is mind boggling to me since it's a safe local investment with plenty of meat on the bone.

    :( 

    It seems like there's a HUGE missed opportunity to offer HELOCs or stand alone 2nd mortgages on investment properties with a ton of equity. you would think someone would bite on something in the 60% CLTV range, but apparently not yet! 

     Thanks for the input!

    0Reply
  • Jay HurstBusiness Member
    Lender · Dallas, TX · Member since 2017 · 1k+ posts · 1k+ votes
    3y
    Quote from @Jonathan Goldman:

    I wanted to see if anyone knew of a lender that does a 2nd mortgage on an investment property? 


    Any recommendations are welcomed! Trying to think through how to access more of the equity in this property and redeploy into more opportunities.

    My current loan structure is:


    First mortgage OLB is around $347k at 2.75% 

    HELOC is at $382k prime plus 3% (currently has a 12 month rolling cap so I'm just now shooting up to 9.5% this month but will be at 10.5% before I know it.)

    The current valuation is $1.5-1.6M. 
    The current use is a beach house vacation rental with about $140k annual gross bookings in Virginia Beach. 

    1) I don’t want to lose the 2.75% rate IF there’s a creative way to tap into the extra equity. (Maybe there’s not?)

    2) I would be okay if I could do a standard cash out refi at 5.5-6% and just have one $1M mortgage on a 30 year term Because it would still Cash flow as a STR. (But this doesn't exist right now unless someone knows where you could find this?)

    3) the highest second mortgage I've found on a HELOC is $400k right now if I were to refi my HELOC into another HELOC.

    Thoughts?

     @Jonathan Goldman   Do you use the property persoanlly as a second home for 14 days a year or is strictly an investment property? 

    Hurst Real Estate, INC4.987 Reviews
    WebsiteView Page
    0Reply
  • Patti RobertsonBusiness Member
    Property Manager · Virginia Beach, VA · Member since 2016 · 2k+ posts · 2k+ votes
    3y

    PMing you.

    757-472-2547
    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free