Rental Property Investor · atlanta ga · Member since 2014 · 31 posts · 11 votes
Hello everyone here is the problem:
I was on cruise control getting sfrs and rehabbing and leasing up till I hit the skids with the "more then 4 mortgaged" homes and they will no longer allow me to cash out on what I own at LTV. So I have 3 free and clear with a total value of 375k
Now I can't find anyone who can cash me out so I can keep going, buying, fixing, renting you know the drill. So....good credit 720...good dti good dcr someone must have a product for me.?? Own a total of 8 sfrs 3 are free and clear.
Are you going to Mortgage Brokers? This is a common mistake many make. You are now a 'Business Owner'. You need to deal with Business Bankers. My suggestion, head to a smaller local financial lender. Speak with the Business Banker.
Smaller local banks have a more vested interest in the local community. But you need to find a lender that is a Portfolio lender, meaning they keep the loan in house and aren't going to sell it off.
Good luck, and congrats on the properties you do have.
I went to a local bank and got Line of Credits (LOCs) on the properties I paid cash for. This was through the commercial lending dept. I like the LOCs on the paid off properties as I invest by the 50% rule but use 100% of rents (after utilities) to pay down the lines to save interest charges instead of saving cash in a money market account. With the LOC, every dollar I pay the line down with can be pulled back out again for the next investment or a large repair vs it disappearing in a mortgage. This has my CapEx and Repair reserves 'earning' 5.5% in the LOC instead of 0.5% in a money market.
70% LOC would be great. I would prefer a loan as I could then take the proceeds and use as down or rehab money for the next deal but would consider a LOC as well. Local banks will not give me that. :(
Like @Bob Hines said, I am working on just that. I am setting up the LLC then putting my properties in it to set up the LOC. Advantage is taking out only what you need at the moment. Keep asking around. I went through half-a-dozen before I found a bank that would work with me.
@Obin Olson if you're actually looking for the name of a lender you'll need to post in the Marketplace forum. Discussion about possible types of lenders is the most that can be discussed in this forum.