HELOC on an investment property

[Nicole Heasley Beitenman]

My dad flipped a house over the summer that we have not yet sold. Our idea was to add my name to the title, take out a HELOC under my name, use that money to pay him for the house, and then I would rent it out and make monthly payments on the HELOC. I've spoken to one lender, and she said a HELOC can't be done on an investment property. This makes no sense to me. He owns the home free and clear - no mortgage, liens, or anything else. I don't understand how you can have equity in a home that you own and be told, "This money is yours, but there's no way for you to access it, sorry." What are our other options?

[Kyle J.]

Hi @Nicole Heasley Beitenman.  Most lenders won't do HELOCs on investment properties but there are some that do.  When one bank tells you that they don't do them, all that means is that particular bank doesn't do them.  A bit like Home Depot telling you they don't have any hammers.  Doesn't mean you can't get a hammer...it just means that Home Depot doesn't have them and you need to go somewhere else.

It may take a few phone calls, but you'll eventually find a lender who can help you.  And here's some questions to ask when calling around: What You Need to Know When Shopping for a HELOC.