We own 5 properties in Mesa, AZ that have now appreciated so significantly, we'd like to tap into the equity. A refinance is not really of interest as the current mortgage loan rates are 30-year fixed and well below current market rates. We also don't want to increase the overhead of the current properties. Our thought was to use a HELOC to fund another purchase, and then excess cash flow from the new purchase (as well as current properties) will pay down the HELOC before the variable rate is a problem. This strategy has worked well using a HELOC on our primary residence.
However, finding a lender that will give us a HELOC on an investment property has been challenging at best.
Any recommendations for HELOCs on investment properties in AZ or how to tap into equity on investment properties that have an exisitng 1st lien without a refinance? We are looking for one on a SFH that has a mortgage that is currently at ~50% LTV, and one on a condo that is completely paid off.
Have you tried local AZ banks and credit unions? They should be interested in the condo.
Yes, we have tried local banks and credit unions. Ironically, most of them are interested in the SFH and won't touch the condo. I found one bank that would do a Home Equity Loan, but not a HELOC, on the condo. And on the SFH - the LTV limit is really low but once they find out it's an investment, they can't underwrite it.
Try the commercial side of the banks and credit unions.
@Jonathan Schwartz I used Credit Union West a few years ago to get a HELOC on a rental house I own. I'm not sure if they're still offering the program, or if they'll do second position on investment properties.
Try Wells Fargo. They are very stingy and conservative but I know they are one of the only lenders offering HELOCs on rental properties in CA. Not sure about other states.