HELOC on rental property

[Aaron Smith]

Hi BP,

I'm nearing the end of a 4 unit condo conversion in Washington DC and looking to hold the condos for the long term and take out HELOCs on them. Only issue is that banks and credit unions rarely offer HELOCs on rental properties. I did find a few, but they have restrictions which exclude me:

PenFed: Will only do it if you own fewer than 3 properties. I would have to sell one to do this, or transfer it to family or something. However, in DC you have to pay transfer and recordation taxes if you quit claim deed, which is 1.4%

Navy Federal CU: Wont do it if its a condo and you own one or more condos in the same building.

TD Bank: Requires that the 1st lien be under them as well.

All other banks/CUs: just wont do it.

I've called about 50 banks/credit unions. Anyone have any suggestions on how to take money out of these properties. I have 55% equity in them at the moment, with the values as condos. So, there's room to get the LTV up to 70-80%, but no banks willing to do it. Regarding cash out refi's, I want to keep the low rate that I have currently. Additionally, any Refi would have to be a commercial loan with much higher rates, shorter terms and balloons.

Maybe the solution isn't a HELOC? Not sure what else could work, but maybe there is some creative solution. Or maybe there is bank or CU that can do it that I haven't talked to.

Let me know if you think you can solve this puzzle, much appreciated!

-Aaron