Scaling LTR portfolio

Orlando, Florida
Real Estate Deal Analysis & Advice
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Scaling LTR portfolio

David Brown
Member since 2018 · 8 posts · 11 votes

I have a long term rental that cash flows $900/month with about $200k in equity. The interest rate is at 3% on the home and doing a cash out refi would eliminate that low interest rate. The home is under and LLC that rolls up to a trust. Bank says I'm unable to do a HELOC on the property since it's under a business. Any suggestions on ways to access the equity and use to acquire another property without compromising the existing interest rate on the property?

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Kerlous TadresBusiness Member
Realtor · Columbus, OH · Member since 2023 · 1k+ posts · 1k+ votes
1y

Hey David, from my experience, HELOCs usually won't work on LLC properties. I would suggest looking at a refi through a portfolio or private lender that works with LLCs rates might be a bit higher, but it keeps things legal. Another option is using equity from another property you personally own to fund your next purchase, or even private/seller financing, like selling a partial interest or getting a note from an investor.

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  • Michael Murphy
    Investor · Buffalo · Member since 2025 · 45 posts · 27 votes
    1y

    Have you looked into private financing? Maybe you can find someone who would accept a subordinate lien?

    0Reply
  • Arman AhmedPro Member
    Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2024 · 2k+ posts · 961 votes
    1y

    @David Brown

    David — nice position to be in with that equity and cash flow. A few creative options: you could look into a second-position lender (not all banks, but some private lenders will do this), partner with private money using your equity as collateral, or even structure a cross-collateralized loan with another purchase. I invest in the Midwest and see a lot of investors tap equity through partnerships or local credit unions that are more flexible than big banks. Worth exploring those before giving up that great 3% rate.

    [email protected]614-418-6081
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  • Kerlous TadresBusiness Member
    Realtor · Columbus, OH · Member since 2023 · 1k+ posts · 1k+ votes
    1y

    Hey David, from my experience, HELOCs usually won't work on LLC properties. I would suggest looking at a refi through a portfolio or private lender that works with LLCs rates might be a bit higher, but it keeps things legal. Another option is using equity from another property you personally own to fund your next purchase, or even private/seller financing, like selling a partial interest or getting a note from an investor.

    [email protected]614-490-1163
    Kerlous Tadres | Reafco Real Estate541 Reviews
    WebsiteView Page
    2Reply
  • Amber Stout
    Lender · Tampa/Saint Petersburg, FL · Member since 2014 · 356 posts · 148 votes
    1y

    You’re smart to protect that cheap 3% debt. I’d start by reaching out to local portfolio lenders (credit unions are great for this) or a broker (me) who does investor loans – they usually have products designed exactly for this situation and do a 2nd position that'll allow you to tap into the equity without touching your 1st. 

    0Reply
  • Rick Pozos
    Wholesaler, Rehabber and Landlord · San Antonio, TX · Member since 2014 · 2k+ posts · 2k+ votes
    1y

    If it cash flows $900 per month, you should have over 10k in a year. At the same time, put $500 or $1000 of your own money every month to get to a $15k or $20k down payment on the next deal.

    Find someone who will owner finance.

    Get a sub-to deal

    Find someone having some payment issues and do a wrap around mortgage with them. 

    Get a private lender to fund and use the 10k to do repairs if needed.

    0Reply
  • Ashish AcharyaBusiness Member
    CPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
    11mo

    Hey @David Brown! A little late to the party on this one, but hey, congrats on having a property that cash flows and low interest rate - you must've jumped in at the right time. Those are two wins. And I like that you're ready to grow!

    From a tax perspective, you want to make sure you're getting the most out of this property before thinking about the next one, maximize your deductions and cash flow. While you can't do a HELOC on an LLC, a 1031 exchange is an option if you plan to sell and buy another property, though that would mean giving up your 3% interest rate and current cash flow, but it allows you to defer taxes on your capital gains while also upgrading in property value. Otherwise, you've gotten some great advice above as mentioned, second-position lending options, like portfolio lenders, credit unions, or private lenders, let you tap into the equity without touching your first mortgage. I would make sure you are using that cash flow strategically, as Rick suggested, and pair it with tax planning to make the most of both your money and your deductions. 

  • Good luck and happy to connect!

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  • Janet Hepburn
    Real Estate Agent · Orlando, FL · Member since 2025 · 14 posts · 4 votes
    11mo

    Hi David,

    You're in a common spot—lots of equity trapped in an LLC-owned rental, but you don't want to touch that great 3% rate. While most banks won't do a HELOC on a business-held property, there are ways investors access that equity without refinancing.

    Here are the main options to look into:

    Some lenders offer HELOC-style products specifically for LLC-held rentals.
    Look up: Commercial HELOC, Business Equity Line of Credit, or DSCR HELOC.

    Lenders to check: Kiavi, CoreVest, Lima One, Civic, Finance of America Commercial, and local credit unions.

    DSCR second Mortgage - This gives you cash-out without touching your 3% first mortgage.
    Ask lenders for: Business-Purpose Second or DSCR Second Mortgage.

    Because your property cash flows and your LLC is seasoned, you may qualify for a no-lien business LOC (Unsecured Business Line of Credit) through:
    Chase, BOA, PNC, BlueVine, Fundbox, or local business credit unions.

    A cross-collateral loan is another option. Lenders tie the equity in this property to the next purchase temporarily. No refi, no rate change. Great for scaling.

    Lastly, many private lenders will record a second lien behind your low-rate loan as long as the DSCR is strong. Give hard money a try, maybe. If you buy correctly, this could be a win too.

    If you want names of specific Florida lenders or those offering DSCR seconds, just let me know—happy to share.

    0Reply
  • Dominic Marshall
    Investor · Member since 2025 · 17 posts · 4 votes
    11mo

    @David Brown 

    Some lenders offer second-position financing products, but the rates are higher around the 10% range and the DSCR will need to be at least 1. I'm happy to put you in touch with one that I've worked with who offers this product.

    Where are you looking to invest next?

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