Refinancing Multifamily (quad)

[Yuriy Tymoshenko]

Hello, Board.

I want to reach out to your for the opinion. 

I own quadplex that is completely paid off. I want to have refinance the property in order to have cash in case that I want to buy another investment property in the future. I live in one of the houses, I will consider this my primary residence.

REFINANCE GOAL: 4.5%-5% interest rate for 80% of property cost. I want to go with HELOC because its the lowest closing cost and fastest.

I have good credit score and making above 100k. I have plenty liquid and I owe only 23K on HELOC on one of my properties.

So far I contacted:

Envision - Not offering HELOC on MFR

Sun Trust. They asked if I want to do residential or commercial loan. I said residential. They were "guessing the interest rate will 4.99% and closing costs would be $4000".  They can’t do QUAD refinancing. 

First Commercial Credit Union - The rates right now around 7% (variable) and the max they are able to lend is 60%

Tallahassee Leon Florida Credit union. Can't do MFR HELOC

Gulf Winds Credit Union - Not offering HELOC on MFR

Regions Bank - offering 70% max of the appraised value. Residential cash out mortgage.

Fidelity Bank - They are only doing commercial loans on MFR. Asked me for time to evaluate their ability to service me.

Prime Meridian Bank - They offered me Commercial loan. Up to 79.99% value of the house. Its lump sum 5 ARM with interest rate between 5% to 6%. 15 year loan.

Navy Federal.  Getting equity up to 70% Fixed Equity loan. No duplexes.

Residential Equity Loan. Interest rate:

1. Fixed Equity Loan. 8.5%(wow!) for 15 years
2. Line of Credit. 6%(variable rate. can change each month depending on the market) for 20 years.

Is it me or all the banks and credit unions are really "gun-shy"? I mean, I read BRRR posts here and people are taking about refinancing their properties at 4-4.5% and I can't get close to this.

I appreciate any feedback.

[Chris Mason]

Originally posted by @Yuriy Tymoshenko:

Is it me or all the banks and credit unions are really "gun-shy"? I mean, I read BRRR posts here and people are taking about refinancing their properties at 4-4.5% and I can't get close to this.

I appreciate any feedback.

You can't sell a HELOC on the secondary market. That means zero profit on the back-end, and more risk.

It's a completely different product line. More credit card, than mortgage: when people see/know something bad is about to happen, they often max it out without any intentions of paying it back.