HELOC on income producing property

Investor · San Antonio Tx · Member since 2023 · 9 posts · 3 votes

I trust this email finds you all well. I am a property owner in San Antonio, TX, with an income-producing Airbnb that has demonstrated exceptional performance for over a year. I am interested in exploring the possibility of a HELOC against this property to facilitate the purchase of a warrantable condo in Gulf Shores, AL.

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Scott TrenchPro Member

Rental Property Investor · Denver, CO · Member since 2014 · 2k+ posts · 6k+ votes

If you find a HELOC / 2nd position mortgage provider with rates lower than 10% up to a reasonable LTV on an investment property, let me know and we will explore potentially making the lender very notable.

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Erik EstradaBusiness Member
Lender · Member since 2022 · 6k+ posts · 1k+ votes
3y
Quote from @Patrick BlackRock:

I trust this email finds you all well. I am a property owner in San Antonio, TX, with an income-producing Airbnb that has demonstrated exceptional performance for over a year. I am interested in exploring the possibility of a HELOC against this property to facilitate the purchase of a warrantable condo in Gulf Shores, AL.

Hey Patrick,
There is a second mortgage option available for investment properties. You must be able to qualify with either 24 months of bank statements or 2 years of tax returns
[email protected]818-269-7983
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Patrick BlackRock
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Investor · San Antonio Tx · Member since 2023 · 9 posts · 3 votes
3y
Are you referring to Home Equity Loan?
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Erik EstradaBusiness Member
Lender · Member since 2022 · 6k+ posts · 1k+ votes
3y
Quote from @Patrick BlackRock:

Are you referring to Home Equity Loan?

Yes. It is 30, 15, or 10 years fixed
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Patrick BlackRock
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Investor · San Antonio Tx · Member since 2023 · 9 posts · 3 votes
3y
Thank you, I’ll definitely look into that option.
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Scott TrenchPro Member
Rental Property Investor · Denver, CO · Member since 2014 · 2k+ posts · 6k+ votes
3y
If you find a HELOC / 2nd position mortgage provider with rates lower than 10% up to a reasonable LTV on an investment property, let me know and we will explore potentially making the lender very notable.
Podcast Guest on Show #223
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Michael BaumPro Member
Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
3y
"I'll make ya famous!"
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John UnderwoodPro Member
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
3y
Quote from @Patrick BlackRock:

Are you referring to Home Equity Loan?

Home Equity Line of Credit
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John UnderwoodPro Member
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
3y
Quote from @Patrick BlackRock:

I trust this email finds you all well. I am a property owner in San Antonio, TX, with an income-producing Airbnb that has demonstrated exceptional performance for over a year. I am interested in exploring the possibility of a HELOC against this property to facilitate the purchase of a warrantable condo in Gulf Shores, AL.

It still has to appraise as a residential property to determine how much they might create the Equity line for.
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Patrick BlackRock
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Investor · San Antonio Tx · Member since 2023 · 9 posts · 3 votes
3y
That’s my main issue that a lot lenders prefer for the borrower to reside in the property, I converted it from my primary residence to an income generating property.
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Patrick BlackRock
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Investor · San Antonio Tx · Member since 2023 · 9 posts · 3 votes
3y
Quote from @John Underwood:

Quote from @Patrick BlackRock:

I trust this email finds you all well. I am a property owner in San Antonio, TX, with an income-producing Airbnb that has demonstrated exceptional performance for over a year. I am interested in exploring the possibility of a HELOC against this property to facilitate the purchase of a warrantable condo in Gulf Shores, AL.
That’s my main issue that a lot lenders prefer for the borrower to reside in the property, I converted it from my primary residence to an income generating property.
It still has to appraise as a residential property to determine how much they might create the Equity line for.

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Patrick BlackRock
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Investor · San Antonio Tx · Member since 2023 · 9 posts · 3 votes
3y
Quote from @Scott Trench:

If you find a HELOC / 2nd position mortgage provider with rates lower than 10% up to a reasonable LTV, let me know and we will explore potentially making the lender very notable.
I’m exploring my options right now, I got good rates on the original loan so refinancing is not on the table.
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Dennis Muno
Lender · Denton, TX · Member since 2023 · 349 posts · 80 votes
3y
Quote from @Patrick BlackRock:

I trust this email finds you all well. I am a property owner in San Antonio, TX, with an income-producing Airbnb that has demonstrated exceptional performance for over a year. I am interested in exploring the possibility of a HELOC against this property to facilitate the purchase of a warrantable condo in Gulf Shores, AL.

Hello Patrick,
So I think in TX you can't do a HELOC on an investment property. A Home equity loan **may** be possible but not all lenders will be happy to do that
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Zach Edelman
Lender · New York, NY · Member since 2022 · 1k+ posts · 1k+ votes
3y
Any consideration/reason why you're opting for a HELOC over a cash-out refinance?
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Matthew DrouinPro Member
Developer · Rochester, NY · Member since 2016 · 406 posts · 339 votes
3y
@Patrick BlackRock
Do you still technically claim it as your primary residence?
If so you could qualify for an owner occupied HELOC with a local credit union.
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Gp G.
Investor · Atlanta · Member since 2019 · 529 posts · 89 votes
3y
Even I am also looking HELOC on rental property. No luck finding good lender who can do it after trying long time
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Muhammad Patel
Member since 2022 · 15 posts · 4 votes
3y
I would recommend DSCR loan to cash out as that loan is based on the rental appraisal of the property.
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Gp G.
Investor · Atlanta · Member since 2019 · 529 posts · 89 votes
3y
I never did DSCR loan. Any good company that does it. Any risks involved with it. I do not want to disturb existing mortgage as I also got less than 3% interest rate earlier
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Andrew SteffensBusiness Member
Tampa, FL · Member since 2022 · 3k+ posts · 3k+ votes
3y
TD Bank (not sure if they are in Texas) will do up to 4 HELOC's on investment properties per guarantor
[email protected]813-563-0877
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Gp G.
Investor · Atlanta · Member since 2019 · 529 posts · 89 votes
3y
I remember talking with TD in past did not work out for me though
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Gp G.
Investor · Atlanta · Member since 2019 · 529 posts · 89 votes
3y
HELOC interest keep changing like credit cards every now an then. If that is the case it might be risky option
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John M.
Investor · Fairfax, VA · Member since 2015 · 1k+ posts · 801 votes
3y
TD bank offers lines of credits on rentals, but the rate is about 7.5% so I only use it for short term needs or deals that pay above an 8.5% cap to cover the spread.
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Candace PfabBusiness Member
Realtor · Orange Beach AL · Member since 2018 · 150 posts · 125 votes
3y
We started investing in this market in 2009 & happy to share our experience with you if you want to pm me! We have helped a lot of BP members buy in this area and many have utilized a HELOC for their down payment. Most of our condos are warrantable!
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Craig Jones
Member since 2023 · 113 posts · 129 votes
3y
Quote from @Scott Trench:

If you find a HELOC / 2nd position mortgage provider with rates lower than 10% up to a reasonable LTV on an investment property, let me know and we will explore potentially making the lender very notable.

I just spoke with Bank of the West / BMO. Confirmed that they do offer 2nd position HELOC on investment properties up to 69% CLTV. They quoted prime + 1.6% (currently 10.1%) for my credit / LTV scenario.

Also spoke with WaFd Bank (WA, OR, ID, NV, UT, AZ, NM, TX). They will do HELOC on investment properties up to 85% LTV, but *only* in 1st position. Doesn't work for me, but others might be interested. Prime plus 0 - 2% depending on credit / LTV.

Navy Fed offers HELOC on investment properties, max $100K, with a 2% increase over their Prime plus pricing for owner-occupied HELOC. Navy Fed membership requires a military connection, but their pool of eligibility is more expansive than USAA because they include granparents, grandchildren and siblings of vets.

Fremont Bank offers HELOC on investment properties in California only. Doesn't work for me, so we didn't get to other details.

@Scott Trench
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Bud Gaffney
Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes
3y
@Patrick BlackRock some were doing it pre Covid. I know of none doing them now unfortunately.
0 Reply
Muhammad Patel
Member since 2022 · 15 posts · 4 votes
3y
You will not get a better interest rate than what you are at right now. DSCR rate is going to be higher and no there is no risk involved in it except losing your interest rate. If you don't want to lose your interest rate then stick to HELOC.
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