HELOC on Investment properties

10 Replies

I own 2 duplexes and 2 SF rentals(6 doors) all free and clear. My problem is that I can't find a bank that will allow me to get a HELOC on my investment properties because they only offer a HELOC for a primary residence. I can do a cash out refinance but that's not the route I want to go. Any advice?

There is a credit union in the Pentagon that goes by that name, they offer a HELOC product. Be advised they can be challenging to work with.

@Andrew Flora Not being familiar with your area, I’d recommend to keep looking. Particularly at smaller, local banks that work a lot with real estate investors. The local bank I use to fund my flipping projects will do HELOCs on rental properties, so I know it’s possible. Best of luck! - Chris.

@Andrew Flora

PenFed Credit Union. Open an acct online for $5 or $10 to become a member and call the mortgage dept. I have 5 equity lines with them between me and my wife. They will limit the number you take out. Easy to work with, lend everywhere, responsive and in some cases a desktop appraisal.

I'd agree with above- keep calling. I use a regional bank in my area and they do HELOCs on non-owner occupied property. There are a couple hitches that you'll need to prepare for; your ability to borrow will be limited by your DTI, unless you are a high W2 wage earner. Secondly, the LTV will be much lower on investment properties, usually 65% or so. Keep making calls, those banks are out there- focus on local banks and credit unions.

Good luck!

Originally posted by @Andrew Flora :
@Timothy Maloney The combined value is $250-300k and revenue is $43k annually. Every local bank in my area has refused to give commercial loans for rental homes.

 For 1-4 unit properties, lenders don't consider the income approach when valuing properties; they use the sales approach and adjust for income.

There are portfolio products available for cash out, generally around 75-80% loan to value, but the rates are higher than conventional financing.

Best of luck

Stephanie

Originally posted by @Dave DeMarco :

@Andrew Flora

PenFed Credit Union. Open an acct online for $5 or $10 to become a member and call the mortgage dept. I have 5 equity lines with them between me and my wife. They will limit the number you take out. Easy to work with, lend everywhere, responsive and in some cases a desktop appraisal.

What kind of rates did you get with them , IO? any fees?