Accessing equity from multiple properties

[Dwayne Rowe]

How do I access equity spread across multiple properties? I currently have about $600K in equity spread across seven properties. Is any bank offering a HELOC based on the combined equity?

[Randall Alan]

@Dwayne Rowe

We did a consolidation loan through a commercial banker (basically a multi-property DSCR loan) where we took out one loan that paid off 5 higher interest rate properties, and took out cash as well at the same time.
Pretty much any regular bank / lender is going to require themselves to be in first position on all the properties... so I don't think a HELOC type solution is going to work across multiple properties with multiple lenders. Individually a HELOC could possibly work if there is enough equity where it made sense.

Randy

[Dwayne Rowe]

Randy, thanks for your response. I will do some research on DSCR loans.

[Ken M.]

Quote from @Dwayne Rowe:

How do I access equity spread across multiple properties? I currently have about $600K in equity spread across seven properties. Is any bank offering a HELOC based on the combined equity?

It may be tempting to treat them as one property and do what is called "cross collateralization" in order to maximize the amount you can borrow. But it is very risky and you can lose all of your properties if things go wrong. It's a domino effect. 

[Dwayne Rowe]

Quote from @Ken M.:

Quote from @Dwayne Rowe:

How do I access equity spread across multiple properties? I currently have about $600K in equity spread across seven properties. Is any bank offering a HELOC based on the combined equity?

It may be tempting to treat them as one property and do what is called "cross collateralization" in order to maximize the amount you can borrow. But it is very risky and you can lose all of your properties if things go wrong. It's a domino effect. 

 Ken, I would prefer to do that, but I wasn't sure if any banks would offer that type of loan or line of credit.

[John Morgan]

I’d do individual cash out refis on them to scale up.

[Travis Timmons]

Agree with @Ken M. - the juice isn't worth the squeeze to me on that type of loan product. You can get more cash, but you add risk and lose flexibility. 

[Ken M.]

Quote from @Dwayne Rowe:

Quote from @Ken M.:

Quote from @Dwayne Rowe:

How do I access equity spread across multiple properties? I currently have about $600K in equity spread across seven properties. Is any bank offering a HELOC based on the combined equity?

It may be tempting to treat them as one property and do what is called "cross collateralization" in order to maximize the amount you can borrow. But it is very risky and you can lose all of your properties if things go wrong. It's a domino effect. 

 Ken, I would prefer to do that, but I wasn't sure if any banks would offer that type of loan or line of credit.

I think you don't want a bank, you want a mortgage broker.

[Dwayne Rowe]

Quote from @John Morgan:

I’d do individual cash out refis on them to scale up.

Interesting approach, how would multiple refi affect my credit score?

[John Morgan]

Quote from @Dwayne Rowe:

Quote from @John Morgan:

I’d do individual cash out refis on them to scale up.

Interesting approach, how would multiple refi affect my credit score?

I’ve done 5 cash out refis to buy 12 houses with the cash and my credit score is 790. I currently have 20 mortgages right now.  If your credit score is 740 or higher, you’ll get the best terms and rates. 

[Ken M.]

Quote from @Dwayne Rowe:

Quote from @John Morgan:

I’d do individual cash out refis on them to scale up.

Interesting approach, how would multiple refi affect my credit score?

It isn't refinancing to take out money that I have a problem with, it's "cross collateralization". When next you need money, or want to sell a property, you have to sell ALL of the properties unless the lender allows differently. They based their loan on ALL of the properties, if you reduce their collateral value, you worsen the position that they did the underwriting on. They typically won't agree to that.

[Dwayne Rowe]

Thank you all for your feedback. I will explore the refi avenue to access the equity.