Seeking a HELOC or possibly mortgage

4 Replies

I own my home outright, which is worth around $300K, or probably a little more. I've lived here for 13 years, and paid it off about 3 years ago. Ideally I'd like a 20% or 25% HELOC, although I don't have need of that much right now, but I'd like the option for that much when I start to do larger real estate deals. Right now I want 10%, whether even if that means a lump sum loan or mortgage, though obviously a HELOC will give me more flexibility in the future.

My fiance and I recently started a real estate investing LLC, and are also starting an ecommerce LLC. I need startup capital and to pay for training and mentoring. Banks don't look very kindly on those reasons, plus I'm in the process of rebuilding my credit. And my recent income and future income is much higher than is reflected in my last 3 tax returns. Most importantly, I want the money quickly, and am willing to pay a higher interest rate if I can have the money by next week.

I took another real estate seminar this weekend, and the trainer suggested I try to find private money. He said if he weren't contractually forbidden he would have lent me the money himself.

I'm willing to pay above market rates. If anyone can tell me how to make this happen, please respond.

Unfortunately, hard money lenders are not able to lend on personal residences due to "consumer protection" legislation enacted in the last 4 years.  While there actually is a small window through which hard money or private money may legally enter the residential homestead lending space, the penalties for even small missteps, as well as the cost of compliance are so high that few if any find it worthwhile.  

We can lend on rental properties or investment properties only, You would have to move out and rent it in order to pull a HELOC out via hard money. Why not get a converntional line of credit?

My credit is poor. I'm in the process of rebuilding it, but I was already turned down by one credit union. They want 3 years of tax returns, but this year I started earning more with my job plus my fiance moved in, so I'm in a much stronger financial situation than my documentation shows. Plus we've started a real estate investing business and an e-commerce business so the next 3 years will be drastically different than the past 3. 

I'm willing to pay above market rates to compensate for all that, plus any lender would have a lien against my house if I ever failed to pay. But banks don't have the ability to charge 8% or 10% on a riskier loan.

If real estate investors can't make this kind of loan for legal reasons, does anyone have any other creative ideas?

Looks like you have lots of equity. Consider borrowing from yourself on your terms. If what you want money for is to control real estate investments, you can create a mortgage against your home.

Have a title company create mortgage with split notes, use the notes as down payments or exchange for equity.