Investment Property HELOC or Home Equity Loan
I am looking to leverage the equity I have in an investment property in order to update the kitchen/bathroom however I do not want to do a cash out refi because my current loan is at a 3.5% interest rate. Are there products for this (Home Equity Loan or Line of Credit... or others?) where I could keep the majority of my loan balance ($140K) at the 3.5% and pull out cash (apx. $30K) that I would pay back slowly over time using the increased rent? A few notes that may impact your answers...
*I own the property in my personal name with my husband (he has a W2).
*I probably have about $50K of equity in the property AS IS due to appreciation/loan paydown since my purchase.
*I already have a HELOC on my primary residence that I use to fund other BRRRR deals so I'd rather not use that if possible.
Thanks in advance for any help on this!
Emily - I've found it very difficult to get a line of credit and/or loan in a second position for an investment property. I've called many banks and credit unions and all of them I've called do not want to be in second position. I would encourage you to think about whether you can get a personal unsecured line of credit yourself or think about borrowing money in the short term (9-12 months) from investors to help the purchase and renovation costs in a BRRRR strategy. Good Luck!
@Emily Althouse do you not have the funds in your primary HELOC to use it? IF you have one already set up I would use it. Setting up a second on an investment with little equity in it could be difficult right now. Also what does it matter where the debt is if you are paying it back?
Best of luck!
Try WSFS. They are pretty reasonable.