Taking equity out of a rental property?

Question

So I am trying to take equity out of a rental property but the lender informed me that I can only do that if its my primary residence or a second home. Is there any other way to withdraw the equity? Is a cash out refinance my only option?

Upon doing this I will have around 100K to use as my down payment for a hard money loan to start my first BRRRR. Any suggestions or tips please advise.

Jinhee Hann · Answer

@Salvador Figueroa

Look into both cash out refi be a stand alone HELOC (leaning the existing first mortgage alone)

I like penfed for investment property HELOC. They go up to high CLTV. Higher than conventional lenders. But if you don’t need high CLTV HELOC, most banks will go up to 80% and might have lower rate.

PNC bank has a HELOC that’s a fixed option. You can fix the rate so that it’s not a variable, up to 30 years.   1,3,5,7,10 and 30 years options I believe.

Dave Skow · Answer

YES   1)  there are  cash out  refinance  1st mtg  options  ( assuming your loan to value  qualifies )  2) there are some HELOC  lenders that will offer  HELOCS  on rentals

Justin Phillips · Answer

Hi Salvador, you can definitely access equity in an investment property. I sent you a PM with some info on a specialized Heloc with more staying power and longer access to equity. It's a great time to lock-in that access to equity, with these inflated values. Helocs are great because you have that access without needing to pay for the equity starting day one. That way you can build that line up, and when you find a good deal you'll just write a check.

Jesse Rivera · Answer

Yes, you can do that. Need to find another lender. (I don't do HELOCs, so I am not your guy).