How Many HELOCs can a couple (or their LLC) have?

[David Thompson]

Hello everyone,

My partner and I are new to investing and are planning out our strategy. We are looking at the BRRR strategy. We are closing on our first investment (cash) in the next few weeks (waiting on the seller), and intend on getting it fixed and rented, and then refinancing it for 80% of the FMV/ARV. With this amount, if we stay within our repair budget, we'll be able to use that cash to do 2 deals, just like the first. So, we're looking at geometric progression, or a doubling every few months (assuming 2 months for closing, rehab, leasing and getting our HELOCs in place.)

This looks fantastic on paper, but we see a fly in the ointment: are we going to hit a roadblock with banks refusing to offer HELOCs? We are arranging this deal (and future deals) so that we have enough equity after repair, to pull out 80% in a HELOC to do the next two deals.

Based on this plan, what are we missing?  I have the idea that HELOCs are loans secured by assets (the home in question), so that debt/earning ratio isn't a part of that decision.  

Please assist in my education!  Thanks very much!

David & Jaysa

[Christopher Brainard]

@David Thompson

Talk to a local commercial banker and ask him about a portfolio blanket mortgage/loc. We have one single line of credit which covers 12 properties. The commercial lender is going to offer you a lower LTV and a slightly higher interest rate, but it basically unlocks unlimited financing.

-Christopher