HELOC on an investment property

17 Replies

I have been told banks will not provide a HELOC on a investment property. Does anyone have experience with this? I am doing a BRRRR and I'm fine with doing a CO Refi but HELOC might give me more to reinvest. Seems banks willing to provide a HELOC are hard to find.

@Brian Sanchez Yes it is possible to find banks that will do a HELOC on an investment property. You will probably have to check with small local banks or credit unions. You may have to make several phone calls but I have been able to find some banks up here in Washington that will do it.

@Brian Sanchez I have a commercial mortgage on an investment property with a small local bank that acts as a line of credit. I paid closing costs and mortgage tax but I am only paying interest on what is drawn off the “mortgage line of credit”. I can pull off it whenever I want, pay it down and repeat. It’s an unique mortgage but has worked great for me.

@Brian Sanchez Had done some research for my CA rental a few months back. Didn’t get one (yet) but found the following banks that offer HELOCs on investment properties:

Union Bank, Fremont Bank, Redwood Credit Union, California Bank and Trust. CBT had the best rates.

Hey Brian,

I have a heloc called an all in one loan or AIO loan that is now available for your investment property up to 70% LTV, let me know if you have any questions about it.

Originally posted by @Brian Sanchez :

Will a bank do a HELOC without a first? Will I need to refi and split between a first and a HELOC?

 The Heloc I do is only in first position on 1-4 unit investment property up to 70%.

Navy Federal will only do 1-2 units not 3-4 units up to 70% on investment HELOC last I applied.

Penfed will only do heloc up to 80% but max 3 total financed properties unless they've changed from prior and they didnt want to do 3-4 units either.

The HELOC I can setup will work for up to 80% for owner and 70% LTV for non owner occupied 1-4 units and is interest only for 10 years and drawable all 30 years unlike most helocs which are only accessible or drawable for first 10.

Originally posted by @Kyle J. :

@Tariq Khan Wells Fargo and PenFed are two others that offer HELOCs on investment properties. 

@Brian Sanchez Yes, you can get a HELOC without having a first mortgage. For example, if your property is owned free and clear.

 Penfed was a decent rate but wells was like 7-8% and only up to 60% last I inquired so these 2 are pretty limited.

BECU or Boeing employee's credit union allowed 1-4 units but to 80% but is only available in limited amount of states and has restricted loan amounts like 100k max after 85% LTV so its mainly designed to be behind a 1st mortgage. Under 80-85% BECU will go to 250-500 loan amount so if you're looking for a first position HELOC it might be best suited at a lower LTV like sub 80%. Their rates were better than Wells Fargo last I checked.

I was in this predicament last fall. If I did cash out refi, I’d pay thousands in closing costs and I’d have to start over with new mortgage on the rental, paying mostly interest.

So I took a HELOC on the rental, pay interest only, only paid like ~$300 to get the home equity loan on the rental. Used the new capital on a BRRRR and created $38,000 in equity. Cash flow is low but house is in a highly desired area and rent will go up over time, as well as property value.

If all the numbers work, then consider proceeding but be wise. 👊🏽

@Jackie Hung - did you speak to someone in the business services department (commercial side) of those banks? If not, you may want to call the BS department of local credit unions as I've found they were able to accommodate all my needs when BRRRRing property under my LLC. Good luck

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