How do I get a line of credit from my existing equity?

[Jason Smith]

Over the last few years I have been using flipping as a primary way of raising capital for my buy and holds. Using this strategy I have built my holdings to over 200 k in equity. I would like to start leveraging that and putting it to work. The issue I keep running into is that lenders want to be in 1st position. Meaning they will not allow me to use my equity to obtain a line of credit.

I would rather not do a HELOC on each property due to the associated closing costs with each loan.

What can I do in order to tap into this equity and put it to work for me? Are there any lenders that will take a 2nd position? Who are they?

[Josh C.]

200k of equity on 300k of assets or 200k on a million? It makes a difference. Most lenders don’t like more than 70-80% loan to value. So if that’s where you already are you probably won’t have any luck. If you are way below you can probably find some who does second mortgages. Start with the bank that has your first mortgage

Good luck.

[Corby Goade]

Most HELOCS are no closing cost loans. They're really the cheapest money available out there. If you haven't found a bank that will give you one, keep asking. That's how we built our portfolio, and other than cash, I wouldn't do it any other way. Don't give up, keep pushing, keep calling banks. 

[Teri Feeney Styers]

@Jason Smith it sounds as if you own multiple rentals with a TOTAL of $200k equity - not just one correct? If that is the case then you need to talk with a local bank that does portfolio loans. I just had a client buy a property by drawing some equity out of multiple properties and financing the rest. The "down payment" came via the portfolio loan package as did the long term mortgage. However, @Josh C. is correct - they are only going to loan you a percentage of the value of all the properties added together. HELOCs are the same way - max is 80% ltv - they are also usually for a primary residence. And yes, they will take a second position. 

[Corby Goade]

You can get HELOCs on multiple properties and they do not have to be primary residences- for a HELOC on a primary residence, you can go up to 95% LTV, for non-owner occupied usually the max is 65% LTV. When you start borrowing that much money through multiple HELOCs, the limiting factor tends to be DTI, not equity.