HELOCs, how soon can you get one?

[Andres Perez]

I am looking for a method to get the equity out of a cash-purchased home ASAP. A regular bank cash-out refi requires at a minimum six months of ownership.

I was thinking of using a HELOC to get the equity out. A quick google search shows that some institutions require 30 to 45 days of ownership, others more.

I am assuming the ownership time requirement is institution-dependent. Does anyone know of lending institutions that do not require a specific time of ownership to start the HELOC process?

Are there any other financing options that would be cheaper and faster?

I thought that if an excellent deal came up, a hard money lender could be used until the HELOC cleared. (Fastest but expensive)

[Ben Stoodley]

Hi Andres,

HML typically fund 80-90% of purchase + 100% of rehab. So if a new deal does pop up, you would need 10-20% of the downpayment, plus fees. HML do not typically care if this downpayment comes from cash/checking accounts, IRA/Investment accounts, or HELOC. So as long as there is enough capital to show, you should be fine. This may help you pencil out the exact amounts you are looking for and therefore how much you need that HELOC , or whether you need the HELOC before purchase or after.

The only other financing option I would consider in your shoes would be a capital partner for future deals. Personally, I would create an LLC with a hands off investor, put their capital (and yours if needed) into the new LLC bank account and buy 1 or 2 or however many deals you want to with this investor. You can then create a new LLC (or just amend current LLC to remove investor) when you are ready to go off by yourself.

Good luck!