Advice on getting a HELOC on a rental property?

Question

I am looking into getting a HELOC on my rental property (so that I can make more competitive offers on future investment properties/ access the equity for renovations), but it seems like most banks say that is "too risky" and will only allow me to get one on the home I occupy. I've only lived in the home for about a year and a half, so there isn't a ton of equity in it yet, but have owned the rental property for 4 years and it's gained a ton of equity (in the Denver area) so I'd love to access that. I have heard that it is possible to get a HELOC on a rental so I'd love to get any advice (specific bank recommendations, what to say that could help, etc.) from others who have done so in the past. Thank you!

V.G Jason · Answer

Taking a loan to pay for a loan

Ryan Williams · Answer

@Caroline Kennedy There are a couple of local lenders that offer these. Some of the credit unions offer them, but more and more have not offered Helocs on investment properties after rates increased. I was exploring the same options and Canvas Credit Union does them locally and provides a decent rate. Like @Tony Severance is offering, most will only allow you to go up to 75% Loan to Value. I'm trying to find ones that will do it in the 80-85% range but haven't had much luck.

Tony Severance · Answer

@Caroline Kennedy We have access to investor HELOCs with 5, 10, 15, and 30 year terms with up to 75% LTV.

Erik Estrada · Answer

They are rolling out second mortgages for non-owner occupied properties. They offer them in 10,15, and 30 yr terms.

David Mackin · Answer

Spring EQ has an 85% LTV product but it's less of a line and more an equity loan. Full draw. So, it has its pros and cons. This is available through a mortgage broker.

Joseph Turner · Answer

I am currently in the process of exploring options for my first HELOC (that also happens to be a rental) using TransUnited at 70% LTV, which seems quite reasonable for a rental. I found them here on BP under Network tab > Mortgage Lenders.

However, I haven't pulled the trigger on anything as I'm still educating myself on the exit strategies of using a HELOC (and will probably create a separate post for that subject).

Hope this helps get the ball rolling.

Advice on getting a HELOC on a rental property?

Advice on getting a HELOC on a rental property?

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