Property Manager · Jacksonville, FL · Member since 2018 · 514 posts · 470 votes
Hi everyone. I know back before the housing crisis it was possible to get a HELOC on a rental property, but is this still possible today? Have any of you recently done this? We have one single family home and looking to get more. Just wondering if this route would be an option. Thanks!
Hi Elenis, one of my partners just got approved to close on a loan from a Bank called East West Bank: Click here to visit the site
It's the only NO DOC, No Owner Occupancy HELOC that that I have ever seen.
The details on the loan is:
Position - 2nd Lien Position
Amount - $350k
Rate: Variable at Prime plus 2% (1% if 1st Lien position)
Closing Costs: Owner pays closing costs estimated at 5%. This is NYC and we have a hefty Mortgage Tax on multi-family. So at least 2.8% is used up on the 5% closing costs.
LTV: 60% if the CLTV is below $1 Million. 50% if CLTV is above $1 Million.
As @Account Closed mentioned, this is an EXPENSIVE loan.. but... because my investments are in NYC, the Cash Flow is minimal. Therefore, the NO DOC HELOC is really my only way to go for these very expensive, very low cash flow properties. It's still a lot better than Hard Money.
Property Manager · Jacksonville, FL · Member since 2018 · 514 posts · 470 votes
8y
@Llewelyn A. Thanks! I'm actually living in Brooklyn as well, so I know how expensive it is here! That's why we decided to invest out of state. You use this strategy for rentals or for flipping? What area are you in? We are in Crown Heights.
Flipper/Rehabber · Newport News, VA · Member since 2016 · 128 posts · 54 votes
8y
@Elenis Camargo they did not combine them. I did them all separately, but I still got the same outcome. No cost to me whatsoever, Just extra paperwork for them:)
Hi everyone. I know back before the housing crisis it was possible to get a HELOC on a rental property, but is this still possible today? Have any of you recently done this? We have one single family home and looking to get more. Just wondering if this route would be an option. Thanks!
Yes Lafayette Ambassador Bank is the only bank I could find. :-)
Some of my RE Investment Students also live in Crown Heights. If you want to join a group that's focused on learning how to invest in any Neighborhood, whether or not it's for Cash Flow or appreciation or both, send me a Private Message.
I have been investing in Brooklyn since 1997 and currently have 8 multi-Family buildings, mostly 3 and 4 Family.
The neighborhoods we invest in is Ditmas Park, Windsor Terrace, Clinton Hill, and Bed-Stuy.
We had a 3 Family in Contract on Classon and Bergen, but the Seller got sued by a relative and we got out recently. Now we will target a new property soon.
Learning about investing in your neck of the woods will be a contrast to investing out of State. But knowledge is power and you can make a powerful decision once you understand the different strategies.
@Garrett May I found these locally at Hancock Federal Credit Union in Findlay, Ohio. I think you need to be a resident of Hancock county for them though, or an adjacent county. My other lender that has facilitated this was Standing Stone Bank in Lancaster, Ohio. If you need help with contact information for the right person, DM me and I will help where I can.
@Mark Welp, the conversation did not come up. We just pursued the LOC with the entity as an LLC. They didn't raise any concerns about this, at least not to me. I think on the commercial side of things, we just assumed it would be in place as an LLC.
I would say as a caveat, that the properties held in this regard were in a stand alone LLC for clarification.
Property Manager · Jacksonville, FL · Member since 2018 · 514 posts · 470 votes
8y
@Michelle Hansley Yes! As a few recommended, PenFed does this. I called and asked to verify. We purchased another rental property this month so I am waiting for that to close before doing the HELOC on the first property. Are you looking to do the same?
@Elenis Camargo Sorry for the late response. Yes I am looking for a HELOC as well on non owner occupied. Do you have to be affiliated with the military to use PenFed?
Rental Property Investor · Racine, WI · Member since 2012 · 27 posts · 21 votes
8y
@Elenis Camargo These are for sure possible. I'm doing one with a local bank and they are lending up to 75% appraised value. I did have to call around to several banks though. Most banks would only to a HELOC if I carried the first mortgage on the property with them. Also the bank that I am currently doing the HELOC will do up to 100% if its owner occupied.
They are out there you just have to look. If one bank turns me down I then ask if they know who might and they give me a name or two to call.
And even if you find a bank that will make sure to keep calling to see if there are others and what their terms are.
Property Manager · Jacksonville, FL · Member since 2018 · 514 posts · 470 votes
8y
@Michelle Hansley No problem! No, they just require you to open an account and have a $5 balance. Anyone can open an account. I will be doing a HELOC at the end of the year but everything sounded super possible.