HELOC on rental property.

[Patrick Strain]

I have a six unit rental property which I own outright. I'd estimate the value of the property at around $250k. I'd like to open a HELOC for future investments, but my main bank doesn't allow you to use rental properties for collateral. Apparently, this is fairly common. Has this been the case for most of you? Do you have recommendations for national banks that may lend in this situation?

Thanks,

Patrick

[Todd Powell]

@Partrick Strain

This is pretty common now unfortunately. Back in 2005-2008 I had several HELOCS on my triplex properties with Bank of America and then the 2009 economy hit and they wiped them all out. I was happy they didn't call them, but so many investors were handing keys back to them, they made a national decision regardless of your credit and payment history. Of course, I am done with B of A for this reason, and found my local bank, Citizens Bank, to give me 70% for $225,000 on a property. Interesting point here, back when I started getting HELOCS, I was shopping B of A against Citizens Bank and both were about the same, but figured a national bank would be better. Boy was I wrong! My local bank knows my local market! Its about relationship and local properties values, and Corvallis Oregon was not affected much back in 2009 on RE values.