When HELOCC isn’t an option!

Question

Hello,

I currently invest in St. Louis, MO. For the last few months I have contacted more than two dozen lenders (traditional banks, credit unions, etc) and have been told by them all that HELOCCS are not an option.

This has left me discouraged, as I had planned on using my two FREE AND CLEAR units to help finance additional purchases.

At this point I feel as I will never be able to get the equity out of my two units to help with the purchase of additional units.

Outside of a hard money lender to finance my deals what other options do I have?  How can I leverage what I have to get what I need for more deals?

Andrew Postell · Answer

@Kizzy Robb finding a lender who will write a Line of Credit on an investment property is significantly more challenging than finding a HELOC on a primary home.  I've got a couple of suggestions here to help with this. You can ABSOLUTELY find a lender who does this.

• Post this in Missouri forum.  A local bank will have better chances of writing this than a large bank.  So maybe lean on some local people in Missouri to see who they have used.
• If you do want to try to find a lender on your own try to find banks you have never heard of.  The smaller the better.  If it's a bank with one location, that's the one you want to call first.  It took me about 200 lenders to find 3 that write them (that's here in Texas) so expect that many calls to find them.
• Also, try using the term "Line of Credit" when you call a lender.  It's sounds strange but HELOCs are generally written by the residential department.  Lines of Credit are generally in the commercial department.  Sometimes the two department don't even talk to one another.  So try that term and hopefully that will get you to being successful sooner.

Hope this helps!

Scott D Burrows · Answer

@Kizzy Robb

Highly suggest you go with what @Andrew Postell mentioned. I did not know to ask for a line of credit specifically, so I definitely learned something new. Unfortunately, a lot of banks have different policies, but going with ones that have a small amount of locations across your area will be the best bet.

@Ray Johnson

Great advice by Ray, I will actually be checking this out myself.

Both guys gave great advice and I recommend going this route, if you are set on a line of credit.

I do have another company to recommend if you are looking for a more long-term line of credit. RCD Capital is a company I have used and they actually do fairly large lines of credit in the $1MM and $3MM range. Banker I work with there is Jonathan Surak, so just ask for him and he should be able to help you.

Good Luck with Everything!

Scott

Ray Johnson · Answer

@Kizzy Robb  Navy Federal does them for investment properties, you don't have to be a veteran but you will have to have at least a checking account with them which is a cheap price to pay to get the HELOC on an investment property, the info is here Navy Federal HELOC Rates

The investment rates are listed below the occupied home rates

Kizzy Robb · Answer

@Steve Vaughan - Thank you. I appreciate your post & suggestions.

Steve Vaughan · Answer

Seems like a refi could be in order depending on the loan amount at 70-75% LTV.  Below $50k? Much tougher to get.

A Heloc by definition is Home Equity LOC. An investment property is just the LOC part. I heard PenFed does them. Also community banks can customize a blanket portfolio loan sometimes.

Hopefully a lender will chime in.  @Chris Mason or @Upen Patel (my mentions don't work) are great.

Congrats having 2 paid for properties Kizzy!

Kizzy Robb · Answer

@Scott D Burrows - Indeed, it is great advice. I got so tired of being told no, the last bank, I just asked what kind of “products” do you offer for investors, lol. I like being specific and having a clear idea of what I should be asking for.

Kizzy Robb · Answer

@Ray Johnson - Thanks. I was going to open an account up with them in the past. I’ll look into that.

Kizzy Robb · Answer

@Andrew Postell - Great suggestions! I am thankful you responded. To know how many you tried before finding a few who could help, is an encouragement for me to keep asking around. Thank you!

When HELOCC isn’t an option!

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