HELOC & Strategy

[Dolev Shemesh]

Hello, 

I'm in a process of selling some portion of my residential real estate portfolio to fund a new commercial opportunity. The Plan is to come up with $400k for the down payment and for that I'll need to sell about 3 of my rentals. 2 of them are single family with a ton of upside, so I don't foresee any issues selling them. The third one is a condo that I'm having a hard time selling atm. 

Since this is an all or nothing deal, the challenge is to find buyers for all three properties at the same time. I also have a dead line with the seller of the commercial property. I currently have 2 pending offers on the first 2 properties but no inquiries as of yet on the third one, which lead me to my question: Should I go with a HELOC? And if so, does anyone know a good lender that does HELOC on investment property? My measurements should checks out fine (credit, Income/Debt ratio, etc.).

Thank you for all those who could offer any assistance.

[AJ Wong]

HI Dolev. Congrats on the success of far. Condo Heloc could be difficult with recently being listed for sale..check in with @Joseph Chiofalo he's a South FLA based lender and they have DSCR and alternative income bank statement second position programs..they also do mixed use and 5+ units commercial lending. Good luck.

[Vincent Jacobbi]

Hi Dolev - have you looked into a DSCR loan? If it's a good income producing property, you could get up to 75% cash out of the value.

[Patrick Roberts]

Having the condo listed for sale recently will cause issues with some of the nonqm lenders out there, whether for a cashout or heloc. Would the seller be interested in carrying a 6 or 12 month note for you for the remaining downpayment amount to buy some time to liquidate the condo? If not, could you find a private lender to bridge this in exchange for both 1st position on the condo and 2nd position on the new commercial property? Not sure whether there is currently a lien/balance on the condo, so I'm just spitballing - this may or may not work for you. 

[Amber Stout]

If you decide to move forward with the HELOC on the investment property, please note that it can be challenging to get a HELOC on an investment property. Being an investor and lender myself, I have networked with many local banks and found one bank that is able to do investment HELOCs. Shoot me a DM if you decide to do the investment HELOC route.

[Katie Smith]

Hi Dolev. Instead of selling - have you thought about doing a cash out refinance? You can pull up to 80% out (depending on credit score). You'll most likely only need 25-30 days to do the refi. If they are currently listed - you may just need to take the listing down before starting the loan. I'd call around and get some quotes. 

[Joseph Chiofalo]

Hi Dolev,

How much of a line of credit would you need to borrow? 

Our group is helping a client now with a heloc on an investment property in the tri-state area. 

Having good credit and verifiable income to support debt to income ratios is what is needed for eligibility. 

[John Mason]

Synovus does it for existing Synovus customers

[John Mason]

@Amber Stout four or 5 banks do it actually:)

[Anderson S.]

Quote from @Dolev Shemesh:

Hello, 

I'm in a process of selling some portion of my residential real estate portfolio to fund a new commercial opportunity. The Plan is to come up with $400k for the down payment and for that I'll need to sell about 3 of my rentals. 2 of them are single family with a ton of upside, so I don't foresee any issues selling them. The third one is a condo that I'm having a hard time selling atm. 

Since this is an all or nothing deal, the challenge is to find buyers for all three properties at the same time. I also have a dead line with the seller of the commercial property. I currently have 2 pending offers on the first 2 properties but no inquiries as of yet on the third one, which lead me to my question: Should I go with a HELOC? And if so, does anyone know a good lender that does HELOC on investment property? My measurements should checks out fine (credit, Income/Debt ratio, etc.).

Thank you for all those who could offer any assistance.

Hi Dolev, I think a DSCR loan could be a great solution for your situation. Instead of selling those properties with great potential, you could use a DSCR loan to tap into their equity quickly. This type of loan is based on the property's income, not your personal finances, which makes it perfect for investors like us. It could help you meet your deadline for the commercial deal without having to rush the sale of your condo. Plus, you'd get to keep those single-family homes with upside potential. Just make sure to shop around for good DSCR lenders and crunch the numbers to ensure it makes financial sense long-term. Reach out to us if you have any questions or want to explore your options.