Line of credit for a rental property

14 Replies

Hey guys, I have been successful getting lines of credit on my rental properties (Some under my LLC & some under my name) for single family homes I have tenants in. However the bank I typically get these lines from won't give a line of credit for a manufactured home. I wanted to see if anyone else has been able to find a lender that will give a line of credit for a manufactured home? By the way this property and myself are located in Phoenix, AZ. Thanks in advance for your help.

Sorry @Clayton Coombs , I can't answer your question, but my question for you is... How did you get a line of credit against a tenant occupied rental property? I assume they are owned free and clear?

Mine are not, so when I've inquired about getting a line of credit against my rental properties secured in second position, my best responses to date are when they say NO before starting to laugh, as it is annoying when I must wait for them to stop laughing hysterically before being told NO.

Originally posted by @Jonathan Taylor Smith :

Sorry @Clayton Coombs, I can't answer your question, but my question for you is... How did you get a line of credit against a tenant occupied rental property? I assume they are owned free and clear?

Mine are not, so when I've inquired about getting a line of credit against my rental properties secured in second position, my best responses to date are when they say NO before starting to laugh, as it is annoying when I must wait for them to stop laughing hysterically before being told NO.

 @Jonathan Taylor Smith my rental properties are owned free and clear so I haven't been in your position. I can understand where you are getting some drawback from a lender wanting to be in second position on an investment property however I assume you could probably find someone to do it but it will likely cost you a hire interest rate. I don't know anyone that could do that for you considering I have never been in that position. My advice would be to keep looking because you should be able to find someone, However I don't think it will be easy. Good luck!! 

From my experience is that a lot of people typically have most of their equity in their primary residence. If you have equity in the home you live in maybe start there for a line of credit.

@Jonathan Taylor Smith

I am currently working on getting a HELOC through Penfed Credit Union (as recommended by someone on here!). They will take second position on a tenant occupied rental. Their terms seem really good too. It may be worth looking into.

Not sure if they would do manufactured homes, but they may be worth a call. If they are willing to take second position on a mortgage they may be willing to take on a manufactured home.

I would be nervous about using HELOCs for investing considering they can call them due at anytime. Does not seem the safest way to finance ?

@Mary M. I use it as a safety net for my investments. I wouldn't dip into it unless I absolutely had to, or unless I found an amazing deal I couldn't pass up. It gives me confidence to buy more properties with the cash I do have, knowing if anything unexpected happened my HELOC could cover anything.

I have HELOCS on all my manufactured homes with land rentals. I called (no exaggerating) more than 80 banks to find only 3 that will lend on manufactured homes with land. Call the local credit unions, savings and loans, and community banks.

@John Kim Rate for HELOC from PENFED is prime rate if it's owner occupied or prime + 1 if it's tied to an investment property.

Right now I believe that is 5% and 6% respectively.