Any good HELOCS for investment homes?

Question

I have a rental home that is paid off and I would like to get a HELOC on it for future liquidity.  I have found a credit union that will do a "no yearly fee" HELOC if I just pay about $800 upfront for an appraisal.  The interest rate is competitive but not hugely important, and they have an acceptable limit on how much they will allow to be pulled out.

Years ago we got a heloc with zero fees and they simply did a drive by analysis because the ltv was less than 50%.  I hate to fork over $800 for a formal appraisal.

Does anyone know of a bank or Credit Union that does HELOCs on rental homes?  (We have good credit, good income, etc.)  TIA

Eric Johnson · Answer

Brian, I don't think $800 would be an issue to establish a line of credit on a paid off investment property right now. If that's your only option, I would take it. Doesn't sound like too much of an issue if that means having access to liquid funds for more acquisitions.

Joseph Firmin · Answer

@Todd Palmer Sent you a PM.

Todd Palmer · Answer

@Joseph Firmin I would be interested in this information too, have 2 duplexes and a foreclosure house I am renovating and would like to see if I can use equity to get more properties.

I have tried a credit union in my area with little luck so far.

Richard Helppie-Schmieder · Answer

@Brian Stutzman Local banks will typically open a line of credit for you against your paid off home. The cost for a one-time appraisal seems worth it if it means being able to close more deals. You should get your ROI pretty quickly, but my advice is a line of credit from a local bank that gives out portfolio loans in real estate. (same thing as a HELOC, but don't see them market it that way ever).

Brian Stutzman · Answer

Thanks!

Kyle J. · Answer

@Brian Stutzman  If it's that or nothing, well you may have to go with it.  But I'd at least call around if it's on a single family home because, if it is, $800 for an appraisal is about double what it should cost.

For context, I have two HELOCs on rentals, and one cost me nothing for the appraisal and the other cost me $400.  However, that was pre-COVID.  Your options may be more limited now.  Still wouldn't hurt to call around.

If nothing else, give PenFed a call and see what they offer.  I've seen other posts on here from people who have got HELOCs from them since COVID started.  No idea what they charge for an appraisal though.

Sean McCluskey · Answer

@Brian Stutzman Hi, try PenFed credit union, they offer investment property HELOCs.

Brian Stutzman · Answer

I guess I see $800 as the same as a weekend in Hawaii :)  (when they open back up).  If there is someone with a low or no cost HELOC like I had years ago I would take that over forking over my vacation money.

Joseph Firmin · Answer

@Brian Stutzman Will send you a PM by the end of day (on phone now vs PC) since we cannot provide contact details on the forums. I know just the lender and can also recommend a strategy that could be a game changer for you.

Any good HELOCS for investment homes?

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