New to Real Estate · Member since 2019 · 4 posts · 0 votes
I've been exploring HELOC options for investment properties in Virginia and reached out to a few local banks, but they only offer HELOCs on primary residences. Better.com, however, said they could do it for investment properties and provided some quotes.
That said, their terms seem a bit restrictive. The margin on a 30-year HELOC with a 3-year draw period is quite high. Additionally, they have an unusual initial withdrawal requirement:
This seems less flexible than a traditional HELOC. Has anyone here taken a HELOC from Better.com? If so, what was your experience with their terms and overall process?
Also, are there other lenders that offer HELOCs on investment properties with more favorable terms?
Any recommendations would be greatly appreciated! Thank you in advance
Investor · Clairemont, CA · Member since 2011 · 3k+ posts · 2k+ votes
1y
I have a HELOC on an investment duplex, but not from Better. I closed July of 2024, 12% and a $25K initial draw requirement...fees were low under 1%...maybe even 0.5% I don't recall exactly. If you find a HELOC for an investment property expect it to come at a fairly high rate because there aren't many out there right now. It's a short term product, so just be sure to use it for short term and not get stuck holding a high balance for very long. I repaid the initial draw balance the next day, so the interest paid was like $50 or something...that's a price I was willing to pay to have access to equity when I need it.
I have a HELOC on an investment duplex, but not from Better. I closed July of 2024, 12% and a $25K initial draw requirement...fees were low under 1%...maybe even 0.5% I don't recall exactly. If you find a HELOC for an investment property expect it to come at a fairly high rate because there aren't many out there right now. It's a short term product, so just be sure to use it for short term and not get stuck holding a high balance for very long. I repaid the initial draw balance the next day, so the interest paid was like $50 or something...that's a price I was willing to pay to have access to equity when I need it.
Thanks for sharing your experience! That makes sense—HELOCs on investment properties seem to come with higher rates and stricter terms due.
Were there any specific lenders you considered before choosing the one you went with? Also, did your lender have any restrictions on accessing funds after the initial draw, like Better’s 90-day waiting period?
New to Real Estate · Member since 2019 · 4 posts · 0 votes
1y
Thanks for sharing your experience! That makes sense—HELOCs on investment properties seem to come with higher rates and stricter terms due.
Were there any specific lenders you considered before choosing the one you went with? Also, did your lender have any restrictions on accessing funds after the initial draw, like Better’s 90-day waiting period?
Investor · Clairemont, CA · Member since 2011 · 3k+ posts · 2k+ votes
1y
I went through a Broker and used the lender they selected....I searched on my own and with several brokers who didn't have any HELOC lender's for investment properties in their contact lists. So when I found someone who was able to support what I needed I accepted. All the referrals I had from years ago had tightened up and weren't lending on investments...some may be starting to come back now.
My lender didn't have any restrictions on access after the initial draw, but did have restrictions on transfers for the first 6 months. I could only wire to myself and it had to be a faxed/email wire request not online. I only realized that the first time I tried accessing funds...I had to send to my other account then from there send them to the title company. It was a bit of a pain, but I understand they're trying to reduce fraud etc and there's likely a specific scam/fraud they've seen in the past.