HELOC questions for out of state rental properties.

[Matthew Ware]

I own outright two properties in San Diego that are providing steady combined rental income of approximately 4k a month after expenses. They are worth about 600k each. I would like to take out a HELOC on one of them, so that I can purchase more investment properties with BRRR in mind. I called my bank (Chase) and spoke with a loan officer and she told me they were unable to count my rental income on the house I wished to take out the HELOC, and therefore, my debt to income ratio is too low to qualify for a significant loan. It didn't matter that I have stellar credit and a pile of cash in their bank, or that I was asking for less than 50% LTV. What should my next steps be for finding money that is available for cash real estate deals? Should I keep looking to banks, or will I get the same story everywhere? Is hard money the only option and how does one transition to a conventional loan after rehab without running into the same issue? To complicate matters I live across the country in Vermont.

[P.J. Bremner]

@Matthew Ware

Give Bank of the West a call. They do HELOC on rental properties in California and they go up to 60% LTV (65% with some a manager override). I was in your same predicament, but came across another BP post that was asking this same question and someone recommended Bank of the West. I have not closed my loan yet, but from everything I have seen thus far the outlook is bright.