HELOC Hunting

[Kyle Sutton]

As our primary residence is paid off (that was done a couple of years before I realized that real estate investing looked awesome) I'm thinking that I'd like to look at getting a HELOC for initial capital on my first (few?) deals.

What kinds of questions do I need to be asking going in?  What should I be looking out for?  What should I be trying to make happen?  

I've read that I should look to get this done now and let it sit in my account for a few months before looking to make my first purchase (bc if I end up going conventional mortgage for that they may want to know where this fresh money came from) but beyond that, I don't know much.   Any advice would be greatly appreciated.

[Ned Carey]

@Kyle Sutton I don't know the specific criteria a lender will use. It will vary from lender to lender. 

Yes you want small to medium banks. The reason is most big banks resell their loans to the secondary market. They have to meet the guidelines of the secondary market for their loans in order to sell them. Most of the Government Sponsored Entities (GSEs) were set up to help home ownership not investors. So they do not loan to LLCs or other business entities.

Many smaller banks hold their own loans (Portfolio lenders) and therefore have more flexibility on the criteria they set for lending.

If I was doing this and going to buy in an entity then I would season the money in that entities account. If I was going to buy in my own name then I would  season it in an account I hold personally.