HELOC lender to LLC with foreign shareholder

[John Haveman]

Hi there!

I'm looking for recommendations for a HELOC lender to an LLC with a foreign shareholder.

Property - Atlanta, GA
Property valuation - $240,000 (Zillow $279,000 unlikely)
Current mortgage loan - $120,000
LTV required - 75%

Purpose - to supplement deposit for new property

Loan serviceability - not a problem (salary income)

Don't want to do a cash out refi, as the rate on the current loan is very low.

Any suggestions welcome!

Thanks

John Haveman

[Azeez K.]

Hi @John Haveman      

Thanks for your response. The reason I asked the above questions was to get some further clarity on your situation. Typically, HELOC is very difficult on investment properties that are held under an entity. You can try with PenFed or with PNC banks but its going to be challenging for sure. I have used PenFed to get HELOC on an investment property held under an entity so I can certainly speak from experience that they allowed HELOC on investment property again my situation was different as I was a domestic (owner) and did not have a foreign entity.

Some local banks who may provide a HELOC will do on a lot lower valuation in order to avoid any exposure. Typically, banks won't take a second position on a lien unless there is some significant equity. Another hurdle you may run into is that the banks would look at the ownership structure i.e. if it is 100% by a foreign shareholder it makes things even more difficult so they tend to look for domestic owners/partners with 81% ownership (this however, can be changed based on your operating agreement)- not a legal advice just purely from a discussion stand point.

I can provide some contacts you can connect within the Atlanta market who may be able to provide additional guidance. However, it is challenging but not impossible. If the HELOC doesn't work you can also raise private money to close the deal based on debt or equity structure. I.e. pay someone X% straight debt or give equity in the deal in exchange for the $. However, at these price points its hard for numbers to work unless the ARV is significantly higher,

Hope the above helps