HELOC and Conventional Loans from same bank?

[Dave Roberts]

Greetings, Do any of you have a HELOC with the same bank that you obtain conventional or commercial loans from? My example would be drawing from the HELOC to pay cash-in-full for a house (buy and hold), then refi to a conventional, paying off the HELOC balance. Do your lenders seem to be cool with that, or is it better to use seperate lenders? Thanks!

[Account Closed]

@Dave Roberts I purchased with a HELOC and later refinanced to a commercial mortgage. The property needed work and the interest only HELOC lowered our carrying costs while the property was vacant. The first one I completed was with two separate banks but the lender I'm using now is fine with it. We discussed our plan with lender up front to confirm they were fine with this.

I recently bought another property (all cash using a HELOC). The property's rents are about $200 under market value in the current condition. The property is rented through next May. The property is conservatively valued at $110k. We purchased for $86k. We could have purchased the property with an LTV based on the purchase price of $86k. This would have required us to come up with $21,500 + closing costs when we purchased. Our HELOC is 1.99% interest only through the end of the year, at which point it jumps to 3.25%. I believe it made more sense to update/increase rents to market and then refinance the property based on a conservative 65% LTV following repairs. The seasoning period won't come into play because we will have owned the property over six months. Our out of pocket investment will be less completing it this way.

I'm still a new investor and am open to your thoughts on this strategy.

Thanks!