Heloc vs cash out refi on investment property

[Aubrie Caton]

Hello beginner investor here! We bought a short term rental property in December in Montana the house only had the top floor done so we bought the house and just completed the bottom floor, creating 300k equity. Now that we have finished we want to tap into that equity to buy more properties. We got our interest rate  at 3.65% so I was just going to do a heloc but can not find a bank to do this on an investment property. PenFed just stopped in April, so we just missed it . Our new rate with a cash out refi would be 6.5%… I need advice on what to do? Our credit scores are over 760 does anyone know of any banks offering helocs on investment properties still? 
Also we did heloc on our primary to purchase this home, so that’s why we aren’t going that route.
Any advice would be so appreciated! Thanks in advance! 

[Keith Miller]

Hi Aubrie,

I actually called around to most local banks and credit unions a few months ago, and the table below is what I found for HELOCs on both primary residences, and the lower part is for rental properties. Most will do them, so I'd go for it! It's just expensive to do a cash-out refinance right now, if your mortgage is more than 6 months old. My advice would be to skip the refi and apply for one of the HELOCs below. I ended up getting a MECU Home Equity Loan and had a great experience, let me know if you would like recommendations for who specifically to talk to at each bank. 

Good luck!

Bank	Rates )	Length	Fees	LTV	Annual Fee
Clearwater	Prime+1%	7 years	$500-1,500	?	?
Opportunity Bank	Prime+0.5%	5 years	0.5% origination	75%	?
Stockman’s	Prime+0.7%	10 years	$1,500	?	?
Mountain America	1.99% for the first 6 months, after that it fluctuates, is currently at 3.75%	Open for 10 years, then closed for repayment for next 10 years.	No origination fee, $275 fee for early termination fee.		None!
Missoula Educator Credit Union-NOTE: THESE ARE HOME EQUITY LOANS ONLY	Range from 3.75% to 5.25% (assuming 720+ credit) depending on how long of a term you pick and the LTV.	Depends	$550 total	We can go up to 90% on owner occupied properties.	?
First Security Bank	For 750+ credit score, Prime+0.25%	15 year	Around $1,000	75%	?
Investment Property HELOCs
First Security Bank	For 750+ credit score, Prime+1.25%	15 year	Around $1,000	65%	?
Missoula Educator Credit Union- NOTE: THESE ARE HOME EQUITY LOANS ONLY	Range from 3.75% to 5.25% (assuming 720+ credit) depending on how long of a term you pick and the LTV. There is also another 0.25% added to the rate if the property is non-owner occupied.	Depends on how long of a term you pick and the LTV	$550 total	80% LTV	?