Line of credit for a rental property

Flipper/Rehabber · Glendale, AZ · Member since 2016 · 64 posts · 69 votes

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.

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Jonathan Taylor SmithBusiness Member

Rental Property Investor · Durham / Raleigh (Triangle), NC · Member since 2015 · 841 posts · 803 votes

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.

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Jonathan Taylor SmithBusiness Member
Rental Property Investor · Durham / Raleigh (Triangle), NC · Member since 2015 · 841 posts · 803 votes
7y
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.
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Clayton Coombs
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Flipper/Rehabber · Glendale, AZ · Member since 2016 · 64 posts · 69 votes
7y
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.
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Jonathan Taylor SmithBusiness Member
Rental Property Investor · Durham / Raleigh (Triangle), NC · Member since 2015 · 841 posts · 803 votes
7y
@Clayton Coombs Thanks! That's what I figured... And yes, I do have a nice HELOC on my primary residence that I used to buy BRRRR rental properties and then pay it off with cash-out refi funds.
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Cassi Justiz
Rental Property Investor · Edmond, OK · Member since 2017 · 1k+ posts · 1k+ votes
7y
@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.
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Keith N.
Investor · Raleigh, NC · Member since 2015 · 189 posts · 102 votes
7y
@Jonathan Taylor Smith @Cassi Justiz I just recently used PENFED to take out a HELOC on a rental. There were no closing costs and they didn't even make me get an appraisal.
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Jonathan Taylor SmithBusiness Member
Rental Property Investor · Durham / Raleigh (Triangle), NC · Member since 2015 · 841 posts · 803 votes
7y
@Cassi Justiz & @Keith N. - Thanks... I'll be in contact with PENFED next week! Keith, your in Raleigh? Have we met?
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Mary M.
Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes
7y
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 ?
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Darrell Smith
Rental Property Investor · Pembroke Pines, FL · Member since 2018 · 7 posts · 2 votes
7y
@Jonathan Taylor Smith I think penfed is the way to go,I also recently received a heloc through them good luck.
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Keith N.
Investor · Raleigh, NC · Member since 2015 · 189 posts · 102 votes
7y
@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.
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Keith N.
Investor · Raleigh, NC · Member since 2015 · 189 posts · 102 votes
7y
@Jonathan Taylor Smith I don't believe we've met sir. However, I MIGHT go the BP meetup in Cary tomorrow night
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Account Closed
Investor · Broomfield, CO · Member since 2010 · 187 posts · 54 votes
7y
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.
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John Kim
Investor · Las Vegas, NV · Member since 2015 · 43 posts · 7 votes
7y
@Keith N.
@Darrell Smith
@Cassi Justiz
What are the rates and fees for a pennfed HELOC?
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Tim Johnson
Lender · Grand Rapids, MI · Member since 2018 · 703 posts · 446 votes
7y
Hey guys I know someone that can help out with what your looking for, PM me for a contact details
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Keith N.
Investor · Raleigh, NC · Member since 2015 · 189 posts · 102 votes
7y
@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.
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