Looking to take out a HELOC to get started in REI

6 Replies

Hey Guys!

I am looking into getting a HELOC in the Memphis area. I am trying to find the best rate with lowest fees. I am looking at local banks, but when I googled best rates for HELOC it pulled up a company called Connexus. They are advertising a rate as low as 3.5% for the HELOC, which is lower than the 5 or 5.5% rates I have seen elsewhere.

Anyone have a recommendation on a good place to get a HELOC with low rate? Either local in Memphis or online/elsewhere?

My personal Property is worth about $230k and I owe about $83K on it right now. Looking to take out about 80K to start getting properties under my belt.



@Ryan Schuler probably the best place to ask about this is the Tennessee forum.  Some of the best HELOCs are at local banks and some fellow Tennesseans might be a good place to ask for recommendations.  Just a thought.  

@Ryan Schuler I just did the same on my house. I ended up going with PNC which is who currently has my loan. Just make sure you read the fine print on how they reach there percentage rates. They told me 4.4% but failed to mention that was with auto payments, opening a bank account and taking out the entire amount once funds were received. So I ended up getting mine for 5.5% which is still good considering I have cash at hand for both buy and reno.

Thanks Brent. I am checking with some local banks now. I have a group of RE friends here in Memphis that have offered to help me get started. They are providing some expertise to get me started which has been awesome. Once I figure out where I am going to go I will let everyone know the rate and terms of the HELOC.


I am trying to wrap my head around the refinancing situation after I have purchased a property, somewhat fixed it up and rented it out. Help me understand this a little bit with a hypothetical scenario:

-Let's say tomorrow I take out a 5/5 Fixed Rate HELOC through PenFed with 75% LTV on my primary residence and rate at 5.5% to have a line of $100,000 extended to me.

-I use the $100,000 HELOC amount to purchase a property for $75,000, which I am going to put $5,000 into (closing costs included) so I am $80K total invested in this property.

-It takes me 3 months to rent the place out after closing, at which time I want to refinance the home into a conventional mortgage.


How would the bank look at this from an LTV scenario? How easy would it be to do the refinance?

Does the new refinance affect the ability to pull money out and follow this process with the HELOC over again? Does the fact that it is a rental that is occupied affect the ability to refinance the property in a good or bad way?

If no, how many times can I do this before they stop letting me refinance? 


Ryan, did you eventually get your HELOC with Connexus? I just spoke with them yesterday and they seem to have good rates. Did you also figure out the answers to your last post? Through reading it seems there is a hard limit of 5 loans, but practically you can only get 3 loans. Also, the banks I have spoken with have told me you have to wait 6 months in order to refi based on LTV, otherwise, you will only be able to refi based on the amount you have invested in the property.