HELOC loans on rentals

[Amit Parekh]

I have two rental properties and a primary residence. I have enough equity on two rentals. I called Thirdfederal Savings& loan for HELOC. They said I can get HELOC loan on primary residence only. I cannot get it on rental properties and they doubt if anyone can do it. Here is my plan which I would like to execute.

Rental $300k value, loan left 100k.

My assumption was if I get HELOC on it, it would be 70% of equity i.e $140k in this case.

Following is what I would like to do.

1. I plan to use $120k as $80(house cost)+$40k of rehab and flip it for $200-220k.

2. If house doesn't sell I can rent it for $1400/month. Get amortization mortgage on it and free up HELOC and buy another one plus I will have equity on the home because if would appraise for ~$220.

M I missing something here? These throws me away when bank tells that they don't do HELOC on rentals. Suggestions?