How can I use equity across 11 res units without refinancing each

16 Replies

I have hit a brick wall in my real estate investment business. I have maxed out on rentals I can finance. I currently have 11 rentals. One is fully paid off and I just moved into a new primary house with my family. I have been buying at least one house per year for the last 6 years. I have a little over a million dollars in equity in my 11 rentals. I don't know how to leverage that equity without refinancing each house and I don't want to do that. I refinanced most of the houses last year with low interest rates. I want to wait at least 5 years before messing with the current financing so I can recover the cost of refinancing. -



I have excellent credit and a regular job with steady income. I am interested in getting into multi-family houses or apartments using a portion of my current equity. I have called many banks and no one will give me a blanket loan with my rentals as collaterals or a line of credit for the million dollars I have in equity across my 11 properties. Most commercial banks wouldn't mess with residential properties and the personal bank side wouldn't allow me to combine the equities of all my rentals. Most are offering cash-out refinancing of all the properties individually which I don't want to do 

Are there another options I should consider?

Hi Emmanuel, native Texan here and just wanted to reply as I own a mortgage co that handles DSCR and blanket financing options such as what you are describing (11 properties, one loan, etc). This certainly isn't the norm with most banks!

Originally posted by @Chris Bang :

Hi Emmanuel, native Texan here and just wanted to reply as I own a mortgage co that handles DSCR and blanket financing options such as what you are describing (11 properties, one loan, etc). This certainly isn't the norm with most banks!

Tell me more about how that works at your company and are there certain types of banks or lenders I should focus on for this type of financing?

HELOCs for investment properties:

The DTI percentage range varies by lender, and is less than what you will find for an owner occupied property, due to lender risk. While qualifying for a HELOC is dependent on your home equity and your credit score, good or excellent credit makes it easier to qualify. A good average to shoot for is 620 or higher. Plus, the better your credit score, the better your interest rate.

Ridge Lending All in One, first position HELOC

AFCU does 80% LTV on NOO. Utah

Americafirst 80% LTV on noo 65% LTV Utah

Arvest Bank AR, OK, AL, MO

Bank of Souther California

Bank of West (BNP Paribas) 60% LTV ELOCs

BB&T will loan on a rental portfolio

BBVA, now PNC

Bellwether NH and MA 85% to 100%, draw 10 yrs

BMO Harris, 3 HELOCs to 70% LTV

Boeing employee credit union

California: Cal Coast Credit Union and Fremont Bank

Citizens Bank -Minnesota, only in-state. Kyle Potswald

Citizens first position HELOC

CMG Financial 70% LTV

Consolidated CCU, high LTV NOO LOC, OR, WA

East West Bank, up to 60% LTV with "no docs" San Fran area

Figure 80% on a rental, not in LLC

FirstBank CO and AZ 75% LTV

First Florida Credit Union https://firstflorida.cumortgag...

First Commonwealth

First Midwest, up to 90% Chicago area

First Tech Federal. Wester states. Up to 80% if FICO is over 780, no appraisal under $250k value.

First Republic - California

Fulton Bank

GFA Federal Credit Union 10 yr draw, 10 yr repay, MA

Granite State CU, NH 90-100%

Great Lakes Credit Union

Hanscom FCU, Florida

HSBC 70%, for premier clients only

Horizon, Kalamazoo Michigan

Huntington 75% LTV 5 yr IO product available. Someone reported 80%…need confirmation

Hurst Lending and Insurance Investment property HELOC in Texas. No seasoning. Bridge, portfolio, foreign national and other specialty loan products.

Key Bank, FLorida flexible lender, HELOCs on second

homes and rental properties. 90% LTV on primary.

Merchants Bank MN See Pavel Ushakov

Mountain America Credit Union in Utah, Idaho, Montana, Nevada, Arizona, New Mexico. 85% LTV, promo rate of 1.99%. Can refinance an existing mortgage on investment property to a shorter term "Mini Mortgage."

Navy Federal 80% LTV

Norway Savings Bank, Maine

PenFed - max 3 other properties, including primary. 80% LTV, prime + 1%, <4 properties

Quorum Federal Credit Union 80% LTV, owned by LLC is OK. Very flexible lender. NY. Tiffany Mazzoccoli. 2021

Regions- yes HELOC but no LOC

River Bank & Trust, AL

SCCU Florida 70% LTV, 6.25% interest only, not LLC

SECU NC 65% LTV rate 2.75% Oct 2021

Signature Federal Credit Union 75% LTV

Silvergate Bank

Sound CU "non-owner occupied HELOC, capped at $150K and interest rates are prime + 2%, 3% or 4%, based on credit, not to exceed 70% ltv."

S&T Pennsylvania

TCF Bank

TD Bank 75% line with FICO about 740

TIAA Direct was EverBank

Torrey Pines Bank

Troy Bank & Trust, AL

Trustco

Union Bank, specializes in noo HELOC. KCMO, NE

Union Bank, MUFG.

Upstate Bank in Rochester NY, LOC up to 80%

US Bank 80%

Vectra Bank - Colo

Veritex, Texas HELOC

WellsFargo 60% LTV

Workers Credit Union, MA 80-100%

WSFS...up to 70% on rental

Zions Bank, Utah

@Emmanuel N Okafor - I would definitely look at a commercial blanked loan option (mentioned in prior posts). There are absolutely lenders that will lend on the entire portfolio, which would give you one loan and one payment and open up your loan options for new acquisition again. The LTV and rates are not going to be as good as individual loans, but big picture it would seem to solve your problem. I'm in Oregon, but I have an asset-based lender here I've worked with that does long-term financing like this and they do lend in most other states (you're in Texas, so I'm assuming that's where the properties are?). Feel free to message me and I'm happy to get you connected.

Originally posted by @Kerry Baird :

HELOCs for investment properties:

The DTI percentage range varies by lender, and is less than what you will find for an owner occupied property, due to lender risk. While qualifying for a HELOC is dependent on your home equity and your credit score, good or excellent credit makes it easier to qualify. A good average to shoot for is 620 or higher. Plus, the better your credit score, the better your interest rate.

Ridge Lending All in One, first position HELOC

AFCU does 80% LTV on NOO. Utah

Americafirst 80% LTV on noo 65% LTV Utah

Arvest Bank AR, OK, AL, MO

Bank of Souther California

Bank of West (BNP Paribas) 60% LTV ELOCs

BB&T will loan on a rental portfolio

BBVA, now PNC

Bellwether NH and MA 85% to 100%, draw 10 yrs

BMO Harris, 3 HELOCs to 70% LTV

Boeing employee credit union

California: Cal Coast Credit Union and Fremont Bank

Citizens Bank -Minnesota, only in-state. Kyle Potswald

Citizens first position HELOC

CMG Financial 70% LTV

Consolidated CCU, high LTV NOO LOC, OR, WA

East West Bank, up to 60% LTV with "no docs" San Fran area

Figure 80% on a rental, not in LLC

FirstBank CO and AZ 75% LTV

First Florida Credit Union https://firstflorida.cumortgag...

First Commonwealth

First Midwest, up to 90% Chicago area

First Tech Federal. Wester states. Up to 80% if FICO is over 780, no appraisal under $250k value.

First Republic - California

Fulton Bank

GFA Federal Credit Union 10 yr draw, 10 yr repay, MA

Granite State CU, NH 90-100%

Great Lakes Credit Union

Hanscom FCU, Florida

HSBC 70%, for premier clients only

Horizon, Kalamazoo Michigan

Huntington 75% LTV 5 yr IO product available. Someone reported 80%…need confirmation

Hurst Lending and Insurance Investment property HELOC in Texas. No seasoning. Bridge, portfolio, foreign national and other specialty loan products.

Key Bank, FLorida flexible lender, HELOCs on second

homes and rental properties. 90% LTV on primary.

Merchants Bank MN See Pavel Ushakov

Mountain America Credit Union in Utah, Idaho, Montana, Nevada, Arizona, New Mexico. 85% LTV, promo rate of 1.99%. Can refinance an existing mortgage on investment property to a shorter term "Mini Mortgage."

Navy Federal 80% LTV

Norway Savings Bank, Maine

PenFed - max 3 other properties, including primary. 80% LTV, prime + 1%, <4 properties

Quorum Federal Credit Union 80% LTV, owned by LLC is OK. Very flexible lender. NY. Tiffany Mazzoccoli. 2021

Regions- yes HELOC but no LOC

River Bank & Trust, AL

SCCU Florida 70% LTV, 6.25% interest only, not LLC

SECU NC 65% LTV rate 2.75% Oct 2021

Signature Federal Credit Union 75% LTV

Silvergate Bank

Sound CU "non-owner occupied HELOC, capped at $150K and interest rates are prime + 2%, 3% or 4%, based on credit, not to exceed 70% ltv."

S&T Pennsylvania

TCF Bank

TD Bank 75% line with FICO about 740

TIAA Direct was EverBank

Torrey Pines Bank

Troy Bank & Trust, AL

Trustco

Union Bank, specializes in noo HELOC. KCMO, NE

Union Bank, MUFG.

Upstate Bank in Rochester NY, LOC up to 80%

US Bank 80%

Vectra Bank - Colo

Veritex, Texas HELOC

WellsFargo 60% LTV

Workers Credit Union, MA 80-100%

WSFS...up to 70% on rental

Zions Bank, Utah

 Thanks for the list Kerry. I bank with Wells Fargo and they have temporarily stopped HELOCs due to Covid-19. I will work my way through your list to see if I will have better luck with these other banks. 

@Emmanuel N Okafor   Try to check with smaller local banks or credit unions in your area.  "Portfolio lenders" that hold the loan in-house and set their own lending requirement rules.

I did one in my area pulling $25k in equity from 3 investment properties, for a $75k loan at 6%.  All of the properties already had a 1st.  So it can be done, just call around.

Good luck!

@Emmanuel N Okafor

The only issue I am seeing from your description is that some lenders will limit how many properties you can roll into one tape. The other unknown is what kind of LTVs are we talking here? My lenders care more about the cash flow from your properties than your personal income... If you are out of fannie/freddie slots and only have a few properties that you haven't refinanced yet, why not roll the remaining properties into a blanket and cash out to max LTV. But you say you don't want to cash out either... is that for them only as individuals or no cash out at all even if you grouped say 4 of them together?

You would be freeing up some slots to do your purchasing as you have before... or you can do some more portfolio loans... 

The Investor LOC programs can be helpful as well, but those normally only benefit those who are looking to complete 3-5+ deals a year at a minimum. We offer 3 tiers of investor LOC; $2.5MM, $10MM, and $25MM depending on our growth plans. These are normally setup for short term financing solutions so you can move fast to purchase, refinance into long term loans, then use your cash to buy some more or invest into rehabs... They are not for everyone.

Cheers!

@Matt Greer, I have but haven't had much success. I did find a company that will do interest only portfolio lending. I haven't done that before so I am continuing to explore other options while I give that option more thought. 

@Nick Belsky  I am rethinking my ask now. From all the phone calls and emails I have sent, it doesn't appear that I can tap into my current equity without refinancing and losing the low interest rates I have. What appears to be on the table are the three properties I didn't refinance. I can do a standard refinance of two of them and use the money to pay off the third and still have some money left to add towards a new purchase. If I do that, I will be back at 10 financed properties quickly. My other option on the table is to cash out refinance 2 or the three properties as interest only loan. It will be a non-reported loan so in theory I will have 2spots open up. I have never done an interest only loan so I am trying to figure out all the implications before making a decision. 


If you have other suggestions, I am currently open to hearing suggestions.

@Emmanuel N Okafor

I/O can also be reported... all depends on the lender.

Have you considered 40yr I/O hybrid loan? The first 10 years are I/O at a fixed rate, then that same rate converts over to a 30yr fixed. There a few different versions of it but the concept is the same. Lock in a lower rate now, then you have 10 years to figure out the market.

Cheers!