All Forum Posts by: Steven Griffith

We use the Tellus App. Easy to use, maintenance requests can be sent to me through it, etc.

@Adam Parker

Respectfully, your comment that 'banks aren't doing this' is not true, although I will grant you that they are much harder to find.

Several banks offer HELOCs on rental properties, although the LTV and terms differ. I know this because I took a HELOC out on my rental back in April, during one of the COVID 'peaks'. 80% LTV, 10 yr draw and interest only repayment period followed by an amoritized 20yr repayment period. Bank covered all closing costs. Pentagon Federal Credit Union, or PenFed. Just Google them - all their terms are online, under 'Non-Owner Occupied Homes'.

When I was looking in March, I also found that TD Bank and Huntington Bank both offered HELOCs on rentals too, although only up to 75% LTV. Heck, even the Wells Fargo rep told me they used to do it, but they 'paused' due to COVID. Try giving those 3 banks a call, depending on where your rental is located!

Thanks @Greg Dickerson, I appreciate the insight! I had not heard of this before, but good point about lot location

@Bradley Sriro

I'll get the numbers from the builder after I give him a call. Those numbers will, of course, have to make sense first. I was first hoping to see if anyone else had any advice on things I should 'look out' for or ask the builder about the deal.

Answering your question, it's a huge, mixed use community being built in stages. A little over 7,000 acres, planning for ~22000 homes and upwards of 65000 residents. This will include schools, shopping, residential, etc. Target completion date is 2045 according to their website and master plan file with the city. The lease back would just be until this 'part' is finished, before they would build a new model, so their estimate was 4 years.

@Toby Johnston

This is an old thread - but I have a similar question/opportunity in North Carolina. Did you pull the trigger on this type of deal/lease back? Any lessons learned you can share?

Hey Y'all,

I had a conversation earlier today with a builder regarding his model home. It's a new neighborhood - the model isn't even completely finished yet.

I was initially looking at home prices and considering buying in this neighborhood now, and banking on the forced appreciation as the neighborhood gets built out over the next few decades (a LARGE neighborhood). Builders regularly increase the base price of the model, so I wanted to explore this possibility...and appreciation is STRONG in North Carolina, particularky around the triangle and Raleigh - Durham - Chapel Hill.

Anyway, after mentioning that I'm a real estate investor, the sales agent told me the builder is looking for an investor to purchase the model now, and then allow the builder to sign a 4 year lease-back. She gave me the builder's contact information, and took mine to pass along.

Does anyone have experience with this type of deal? Purchasing a model home at the start of a new neighnorhood and then leasing back to the builder? Seems like a great deal - since it's the model, it'll be kept in peak condition and yet no one will be living there, putting wear/tear on the house, the appliances, etc.

Again, seems like a great deal opportunity. What am I missing? Does anyone have experience with this, and/or can share other considerations or things to watch out for? I'm planning to call the builder tomorrow or Monday to get some hard numbers, so any advice is welcome!  

In terms of turn around time, I was ready to close in 3 weeks and had access to the funds immediately (this was back in March/April). I don't remember what documentation they asked for - I closed on a house a few months before, closed my HELOC in April, and closed on another house in June so it's all running together.

But I know that @Tucker Cummings just used them for a HELOC on one of his rental properties, although I think he owns the property free and clear. Tucker, can you comment on what documentation PenFed requested when you applied for your loan? And what is their estimated closing time now?

@Bud Gaffney

Well, it was my fourth rental, so I guess that's why it didn't come up. Too bad - they've been great.

I know TD Bank does HELOCs on rentals as well, although I think it's only 75% LTV. No idea if they have the 4 property limit like PenFed apparently does. Good luck!

@Bud Gaffney

Not sure why it didn't tag you earlier, but just fyi! Try PenFed.

@Wes Rice

Not in my experience. My investment property mortgage was with Arvest mortgage. But I got my HELOC through PenFed. You do have to add PenFed to your insurance, but that was about it.