Refinance Property with Equity

9 Replies

Just joined biggerpockets and would love some input on our current situation regarding financing.  We are looking to pull out  equity on the only investment property we have at this time.  We were landlords and did a few flips, but then came 2008.  We have a property with a 1st of 161K and 2nd 96K.  Value of home is a minimum of 1.5 million or maybe higher.  Looking to renovate one of the apts that is presently empty as well as start RE investing again.  We are holding on to the property.  We were discharged from Chapter 13 4 years ago.  Traditional financing is not an option, one reason is need to wait 7 years out of discharge, and my husband recently left the rat race and started his renovation business. 

I am thinking hard money can be a way to go, but doesn't seem like a long term option and we are definitely keeping the property. 

Any suggestions/ideas/route from some seasoned investors would be greatly appreciated.

Are you able to pull equity out of your home with a traditional bank or is that not allowed. 

I do not think that a hard money lender will do a HELOC.

Maybe you can find a private bank that can do a HELOC. I think that is your only option. Or maybe continue flipping houses until you're 7 years out of discharge.

Find asset-based lenders who can do permanent loans. Their rates are going to be somewhere between 5-8%, depending on credit, LTV, and cashflow. Their requirements are a little bit more relaxed than banks, and they don't require things like pay stubs, DTI, etc.

@Antoine Martel You're right, HMLs won't do HELOCs.  There are plenty that advertise a fix-n-flip line of credit, but these are not true LOCs, but more like

Updated 3 months ago

more like pre-approvals.

@Nghi Le, thank you.  Will look into it asset-based lenders.

You can keep extending a bridge. You can also refinance after going the hard money approach. Most likely in 3 years you will be looking to anyways to achieve better rates. I will be happy to help if you'd like. 

Greatly depends on the lender. I know of mortgage products for example that will allow you to look at the income being generated from the property itself (don't care about W2, tax returns, etc). They will also allow a BK discharged 4 years ago. Just have to know the right lender with the right products and guidelines. Have to think outside the box and dig around- most traditional lenders don't have products for investors so they don't know these things exist. Not their fault, their company just doesn't serve that market.

Originally posted by @Nghi Le :

Find asset-based lenders who can do permanent loans. Their rates are going to be somewhere between 5-8%, depending on credit, LTV, and cashflow. Their requirements are a little bit more relaxed than banks, and they don't require things like pay stubs, DTI, etc.

@Antoine Martel You're right, HMLs won't do HELOCs.  There are plenty that advertise a fix-n-flip line of credit, but these are not true LOCs, but more like

Although it is unlikely for HML to do HELOC since that H stands for Home, there are those who will do LOC on investment properties; link below shows just one such HML:

https://www.biggerpockets.com/forums/517/topics/55...

Originally posted by @Steve Babiak :
Although it is unlikely for HML to do HELOC since that H stands for Home, there are those who will do LOC on investment properties; link below shows just one such HML:

https://www.biggerpockets.com/forums/517/topics/55...

Have you vetted this lender? I'm pretty that line of credit they're advertising is more like a pre-approval for hard money. i.e. you still need to put in a down payment, they still need to vet the deal, etc. Not a true LOC that you can write a check from anytime.

You could sell equity in the property for cash to another "partner"

You could consider non-conventional commercial lenders. I doubt you will find a HELOC but there are other programs that may fit your needs like cash-out or bridge. Message me if you'd like as I deal in this area. Best,

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