All Forum Posts by: Chris Pena

PenFed (Pentagon Federal Credit Union) offers HELOCS on rental houses. You can own a max of four rental houses. Their rates are pretty good. You have to join PenFed and make a $10 donation to one of the causes to be member. Check out their web site. www.penfed.org

Is there a way to access the equity in your primary residence and purchase 2 4-plexes simultaneously so that you can obtain conventional financing AND get the unit count you are looking for?  Usually you can find someone who is liquidating a portfolio, and often times they own side by side buildings so you could potentially pick up 7-8 units right next to each other.  

Look for portfolio listings, or even multiple units that have multiple buildings.  They may be tied together for financing, but have separate parcel #s.

This will also provide you the best flexibility when it comes time to sell as you can sell them separately if you want.  Most investors (especially the ones starting out) want to use conventional financing, so buying just one of your units (or both simultaneously like you did) will be an option, and open up your Buyer pool.

@Chris Pena

I don't know the specifics of the property but speaking from experience, a Commercial investment under 70 to 100+ units isn't always what it's all cracked up to be. The financing isn't the best (the loan could recast after so many years, and the bank could call the loan in full if you or the property don't qualify), you can get nickel and dimed with common area expenses, and it's not enough scale to have onsite management and maintenance. Also there's higher rates on the loan usually, more down payment required, and commercial insurance required which is more expensive. All of which would cut into your cashflow. And being an owner occupant doesn't give you any additional benefits like it would in residential (because it's over 4 units). 

My question is.....why not get a private 2nd on your primary residence and use that money to acquire the the commercial deal? And if you need to cross-collateralize it with the new building as well, you could. That way you can stay in your house AND buy this new place.