Stuck In A Maze

Member since 2026 · 1 post · 4 votes

I purchased a 2-unit home in 2006 for $150,000, lived in one unit and rented the other until I purchased a coop for my personal residence. The Zillow Zestimate is now close to $500k and I would like to take out equity without losing my very low interest rate. I've inherited a property in NC that I'd like to rehab, reside, refinance and rent. The problem is that I cannot find a lender that will give me a HELOC on either property. I have excellent credit, cash reserves and 20 years of landlord experience. I've approached a construction lender who wants me to hire their contractors. Made me apprehensive. Please give me some direction.

4 Reply

565 views

Most Popular Reply

Caleb Brown

Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes

1mo

It'll be tough to get a HELOC. I would reach out to all the banks and credit unions in the area. Worst case you'd have to refi or 1031 into something else

2 Reply

See this reply in the discussion

11 Replies

Jump to latestLatest

Sort by

Bryce JamisonPro Member
Rental Property Investor · Mebane, NC · Member since 2015 · 493 posts · 439 votes
1mo
You've got the equity and the credit score. Does your debt to income ratio not qualify you? With as much equity as you have, I would think someone would give you a HELOC. I'd try local banks and credit unions if you're not having any luck with the big name banks.
Do you have enough cash on hand to pay for the rehab? Can you take out a personal loan since you have good credit? You could also consider a hard money lender depending on how long the rehab will take.
2 Reply
James Driscoll
Banker · MA · Member since 2026 · 120 posts · 33 votes
1mo
The HELOC roadblocks on the 2-unit probably aren't about your credit or reserves. A lot of banks just don't love putting a second lien on a non-owner-occupied multifamily, especially a co-op situation in the picture. A DSCR cash-out refi on the 2-unit is worth running instead: if that property cash-flows well at current rents, a portfolio lender will underwrite it on the income the property produces rather than your personal tax returns, and you can pull cash out at a competitive rate without touching the co-op at all. Yes, you'd be giving up that 2006 rate, but if the property is sitting on $300k or more in equity and you're leaving it idle, the math may still work in your favor depending on what the new debt service looks like against current rents. The inherited NC property is a separate conversation, but the contractor requirement from that construction lender is standard for most renovation loans and not necessarily a red flag.

James Driscoll
2 Reply
Caleb Brown
Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes
1mo
It'll be tough to get a HELOC. I would reach out to all the banks and credit unions in the area. Worst case you'd have to refi or 1031 into something else
2 Reply
Timothy W Hanson
Investor · Minnesota/Wisconsin/Iowa · Member since 2019 · 49 posts · 77 votes
1mo
Can you try Aven? They do a soft check within minutes so it's worth checking. For a HELOC, I would suggest asking small banks / credit union, they will underwrite your specific scenario and will see the whole picture. Someone mentioned HELOC's aren't available for investment properties, that's not true I've done research on this and they are available.
1 Reply
- Jenna Fawley
  Lender · Pickerington, OH · Member since 2026 · 49 posts · 39 votes
  1mo
  Timothy is right, investment property HELOCs definitely do exist. They’re just a little harder to find because a lot of the larger consumer HELOC programs won’t lend on multi-unit properties.
  
  Kay, I’m a mortgage broker and this is actually the type of scenario where it can help to look beyond just one bank or lender. With the equity you may have in the duplex, I’d look at an investment-property HELOC or second mortgage first so you can leave that low-rate first mortgage alone. Then I’d look at the NC rehab separately.
  
  If you want, I’d be happy to look at the numbers and see what options might make sense. You may have more choices here than you think.
  2 Reply
Josh C.Pro Member
Property Manager · Indianapolis, IN · Member since 2010 · 1k+ posts · 1k+ votes
1mo
ask the lender on the first mortgage for a second line. All my lines of credit are with the same bank that did the first
1 Reply
Calbeny Willfred
Member since 2026 · 15 posts · 3 votes
1mo
Worth mentioning too that a lot of portfolio lenders will also look at global cash flow across all your properties if you have several, not just the one you're trying to refi. Might open up more options than just this one property.
0 Reply
Marcus Auerbach
Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
1mo
People are not reading your post before giving you "advice".
You have a small loan that's 20 years old, you should have paid off half, so maybe 60k left? The interest on 60k does not make that much of a difference.
Getting a HELOC (or BELOC in this case) is going to be more expensive, higher rate. Just do a regular refi, your blended rate is going to be better.
1 Reply
Bryan MaddexBusiness Member
Lender · Charlotte, NC · Member since 2015 · 159 posts · 76 votes
1mo
@Kay Wells You’re running into a very common wall. Most big banks and retail lenders simply do not like doing HELOCs on investment properties, especially 2–4 units. That doesn’t mean the product doesn’t exist.

There are at least 22+ lenders I work with that will do HELOCs on investment properties, and plenty of them will do them on 2–4 unit properties. The key is working with someone who actually knows which of those lenders are currently lending in this scenario.

A couple of important points on how to think about the HELOC itself:

HELOCs work best as short-term debt — ideally under 2–3 years. Because almost all of them are variable rate, carrying a large balance long-term exposes you to rate risk. If you know you’re going to need the money for longer than that, a cash-out refinance (or closed-end second) is often the cleaner long-term solution. HELOCs will also have higher rates vs a cash out refinance.

If you don't have an immediate need for the full amount, the smarter play is often to open the HELOC while you still qualify, leave it mostly undrawn, and only start using it when the NC project actually needs capital. Once the balance starts getting meaningful, then you can look at refinancing that debt into something fixed if rates or your situation make sense.

Also worth running the numbers on a blended rate calculator. If you keep the low first mortgage and put a HELOC behind it, the true cost of the total debt is the blended rate of both loans, not just the HELOC rate. Google "blended rate calculator" and plug in your current first mortgage balance + rate and the expected HELOC balance + rate. That number is what you should actually be comparing against a full cash-out refinance. Use a 9.5 or 10% rate to start off. The higher you leverage the home, the higher your rate will be. One lender will go to 90% loan to value, but rates are usually in the 14s to 16s at that cLTV. (combined loan to value).

Happy to point you in the right direction if you want to share a little more on the current first mortgage balance and rate on the 2-unit, and roughly how much you think you’ll need for the NC property.
Bello Mortgage powered by Coast2Coast Mortgage
Website View Page
1 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.