All Forum Posts by: Clifford Paul

@Tyler Smith sorry I'm a little late here.  I'm tagging @Reid Sullivan here too since he in also in Texas.  There is a LOT of confusion to this subject.  And I mean A LOT.  So I'll try to tackle this one at a time.

First, you can 100%, absolutely, without a doubt, receive a Line of Credit on an investment property in Texas.  

Second, the $$ amount of equity you have it not as important as the %% of equity.  Meaning, if $60,000 represents 10% equity...then you will not be able to get any further loans on that property.  If it represents 25% equity....likely the same story.  Generally speaking, you will likely be required to leave 25% equity in the property with a Line of Credit on an investment property.

Also, Bigger Pockets does have a pretty active Texas forum and this is one of the more common questions we get there. Feel free to follow that forum as it has some pretty good locals that know a thing or two. Usually when I field this answer out in the general forums it about finding this in ANY state so I'll answer it for Texas and for everyone else just in case it get's researched by others.

1. Texas - Cash out loans of any type are pretty challenging here in Texas. Because of this many lenders won't do these loans at all. Finding a lender that does investment property "Lines of Credit" is hard in any state...but here it's even harder. I know 3 that write them locally in DFW...and only one of those will do it state wide. But am certainly willing to share any information if you just PM me. No problem.  And just in case, none of the lenders above will lend a Line of Credit on an investment property in Texas.

2. For everyone else....a small, local lender will be your HIGHEST probability of success when trying to find "Line of Credit" lenders on investment properties. The unfortunate thing here is that investment properties foreclose at a higher rate than primary homes so many banks just don't want the exposure to this. But it is 100% possible to find but you have to put in the time or at least know someone that ALREADY has the connection. Here's my 3 suggestions:

1. Post in the Bigger Pockets STATE forum that you are looking in. There are usually some good, local investors that monitor those forums. Maybe they already have a suggestion or recommendation for you? Certainly try there.
2. Visit your local REI groups. There are many groups that meet across the country. Some post here on Bigger Pockets. Many post on meetup.com. Networking is always a great practice and you never know who you might meet there and what good information they have to share. Would certainly recommend visiting if one is close to you.
3. Calling - and then there's this option. Which is what I had to do. I had to call about 200 lenders (no exaggeration) to learn of 4 lenders who did this and I have some tips. First, when calling banks target the smallest most community based banks you can first. If you have never heard of them, and they have one location - that's a good candidate. No big, national, publicly traded banks will do this loan type. Second, try to ask for "LINES OF CREDIT" instead of "HELOC". I know it sounds like I'm splitting hairs but some banks write HELOCs in their residential department....which won't write Investment Properties. And that residential department will often not speak to the commercial department. So they'll just say "sorry, we don't do it"....not even knowing that they really do! So if you ask for a "line of credit on an investment property" that should get you to the COMMERCIAL division. That's the section of the bank we want. Now, most of these smaller banks may only have 12 employees or so. So don't get frustrated if they don't return your call or aren't in the office. Just call back and be friendly. Maybe play dumb a little "I don't know if I'm in the right place..." "I'm sorry to disturb you, you may not be the right person for this....", etc. Maybe someone can get you to the right person. Again, be prepared to call A LOT

Anyway, I hope some of this helps.  Feel free to post more questions if you need it.  Thanks!

Worked for us & we're having a blast. We were home for ALL the kids going through high school, didn't miss any of their events & we had a nanny for 15 years. Travelled extensively (& overseas) with all the kids several times a year & still do. Admittedly, if you do have a portfolio in REI you will never be 'retired' per se. But if you ever find that niche it can be an exponential cash cow & for us 90% arms length.

Speaking of retirement I finally had to tap into my IRA's/401(k)'s etc this year. The required RMD's left me no other choice. But I do have colleagues of old who are working menial part-time JOBs to afford a retirement they never planned for.

F.I.R.E away....

This post should be manditory reading for all new REI investors.

There are way too many posters on these forums preaching the idea of leveraging a portfolio of junk, 100k homes, in the crap areas that are plentiful in places like the midwest.