Need lending advice quickly! Thank you

[Ken Gurta]

I have been working with a local credit union for almost 3 months on getting a Heloc. The Heloc limit is to be around $68,000. I plan on using most of that as 20% down payments on 2 houses that just became rehabbed and tenant occupied. These houses will produce $1000 monthly cash flow after paying the mortgages and Property manager. My regular lender has approved me to finance the remaining 80% and is just waiting for the Heloc to close. Appraisals have been paid for and performed over a month ago. I have toured these houses and area and know that this would be a very good deal for me.

Now for my BIG problem! I just found out that the underwriter on the Heloc has denied me because he is unsure how I could pay them back. My DTIR by itself is acceptable, but he is afraid that taking on 2 more mortgages might be too risky. I have sent them the leases for the 2 houses, both loan estimates, a letter from my property manager, and a letter from myself explaining how I plan to pay down the Heloc. However, I expect that he will stand by his decision. 

Without the Heloc, I can not purchase the 2 houses. I will lose $1000 that I paid for appraisals and $2000 in earnest money. Does anyone know of any kind of lender that can help me in my situation? I have been an investor for 10+ years, own 4 S.F.H. investment properties, and have a 765 Fico score. All advice is appreciated.

[Scott D Burrows]

@Ken Gurta

Sorry for the hard time you are having. 

Don't take the rejection too harshly... just what some lenders do. 

First suggestion would be to contact a company that I have used called RCD Capital. Ask for Jonathan Surak and say that Scott referred you (I don't get a referral fee). He is a really good guy and they can get you some short or long-term products. Not great interest rates and I wouldn't suggest the long-term products, but it would give you some time to secure another HELOC or financing source for the houses. ( I believe he does have a $1million and $3million line of credit product right now, you just have to have a net worth equal to 20% of the line of credit).

Another option, find a local meetup that is meeting in the next week or so and crowdsource the down payment.  Haven't done this method specifically, but if your numbers work and you have experience, I am sure someone would be willing to give you a down payment loan. 

The third option, take a look at personal loans. I just took one out myself from a company called Lightstream (owned by SunTrust Bank). My rate is not bad and you can pick your repayment period. Believe they qualified me for the loan in a day or so. You could go with a five year repayment period and try to get the down payment this way. A little riskier, but if you believe in the deals and your repayment plan, this could work. 

If you need anyone to talk to, feel free to reach out. Would be happy to help you brainstorm. 

Good Luck,

Scott