HELOC for rental properties

[Brandon Vogt]

I own a handful of rental properties that have appreciated nicely over the last 4 years. 3 of them are owned free & clear. I'm looking to get a line of credit against the sum of the equity on the properties to use for additional investment opportunities, whether real estate or other. I do not want to sell the properties, and I'm not looking to cash out refi. I'd rather have access to cash and use it as needed via a line of credit, if possible. Is there a bank that does a HELOC on multiple rental properties that you would recommend? Should I be talking with local banks? Also, what sorts of terms have others received on this type of loan? Or, are there other strategies besides HELOC that I should be considering? Any advice is appreciated. Thanks!

[Aly W.]

I've gotten quite a few Helocs on our rental properties. Terms are similar - rates range from 3.25% - 5.25%, some are interest only for 10 years, some are P&I, most are 70% LTV with only a couple of hundred dollars in app fees/costs. We did them individually, mostly with TD Bank and recently with a credit union. These are rental condos in FL and one SFR in NJ. They were purchased with cash, then we took out a Heloc, bought another, got another Heloc, bought the next, etc.

Helocs have variable rates though, so even though the rates haven't gone up in the 5 years since we got the first one, they can change, so be aware.

[Neil Aggarwal]

Just to be clear, line of credit and HELOC are similar but not the same thing.

A line of credit is like a pool of money where you can keep pulling money out and in as you desire.  Typically, you will have more than one house as collateral for it.

A HELOC is typically on your primary residence. An ELOC is a loan against an investment property. Typically, you borrow once and return it back in monthly payments.

[Dante Pirouz]

Are there seasoning requirements on ELOCs like 6 months - 1 year?