Low Doc Commercial Equity Lines Of Credit

[Jay Feldman]

Has anyone used a "Commercial Equity Line of Credit" (CELOC?) to refi a group of properties? My thoughts were to have the current commercial (Hard money) mortgage liens released prior to getting an CELOC. I know the hard money lender well enough that I think he would do this to make this happen. Without a long story I would like to use a low doc/no doc/stated (if possible) product. From searching Google I see a bunch of sites saying this is available. (I am guessing Commercial lenders can still do this) Can anyone add what they might know about this? I have (3) three families (all adjoining) and a 2 family about 3 blocks away. They have all had gut rehabs, are rented and I have owned them more then a year. All have HM loans on them which I want to replace with lower interest loans (line of credit) and cash out some $$ as well. @ 70% LTV it might work for me but 75%-80% would be much better. It appears the banks/brokers want the property to be "free and clear" IE: the reason to have the liens removed. I would disclose what and why I would be doing this to the lender.

Please advise.

[Darryl Dahlen]

As Brian stated, there are a lot of sharks patrolling the waters looking for fresh meat when it comes to lines of credit. Most prey on desperate borrowers who are willing to pay upfront fees on the promise of a quick closing knowing the loan has no chance of closing.

Still, there are a couple legitimate lenders out there.

I know of one lender, who is a bank, who has a commercial equity line of credit program. You need at least a 700 credit score to qualify and their max LTV is 75%. The property has to debt service at a 1.2 ratio and they will look at the past 2 years business, and personal, tax returns.

While they can go in second position behind a first, I can almost guarantee you that will not be possible if there is a hard money lender in first position.

The upside to this program is you are dealing with a reputable bank, and their fees are low.

Feel free to email me if you'd like to learn more.