I just purchased a home through seller financing. I have a great amount of equity in this deal. I want to do a HELOC on this investment property; however I am not sure if this is possible. Has anyone done a HELOC for a home that was owner financed?
Thanks in advance for your replies!
Is the title in your name?
Yes, it is in my business name @Christopher Phillips
It's possible, but most banks don't want to do HELOCs to a business. Is it an LLC or just a sole proprietorship business?
@Christopher Phillips Thank you. And it is a LLC
Okay. They definitely don't like doing them for LLCs. the problem is that banks stopped doing them because of the liability. The LLC can become insolvent and there's no one to go after.
But nothing is impossible if you shop around hard enough. You should speak to a few local lenders and see if they have a product that might work for you. They might be able to offer a business line of credit, as an example.
You could always quit claim it to yourself and open the HELOC. I like @Christopher Phillips idea- surely a local bank would extend a line of credit to you based on the equity. Terms would likely look different, though.
Good work, Douglas! Many people make a couple calls and give up, assuming it's impossible. You have some drive in you, keep it up!
I wouldn't use the term HELOC. I would say I want a buiness line of credit secured by real estate.
@Corby Goade Thank you! one "NO" is closer to a "Yes"
@Ned Carey This is true. One bank said no to a HELOC but would give me a line of credit secured by the property. I found this to be interesting. How's investing in Baltimore? I'm not too far from out from your market.
@Douglas Harris I love investing in baltimore. But it is hard to invest from a distance. neighborhoods change very quickly here. Unless you want to spend the time coming up here it can be quite risky.