All Forum Posts by: Tejas Shah

We have four HELOCs on residential rentals with Univest Bank. Two they are the first position, two they are the second position (first position is with another bank entirely). They'll only do $100K per line, but they wrote them like residential HELOCs, so theres a 10 year draw period.

@Gregory H. - Thank you.. I will reach out to Univest Bank. Do you know if they would do properties under LLC. My properties are under LLC and not my personal name.

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Philadelphia, Pennsylvania

Quote from @Larry Turowski:

@Tejas Shah how much equity do you have in these properties? Some banks will to helocs. My bank calls it a cloc, commercial line of credit, maybe because it is under an LLC. But the ones that will generally will only do it in first lien position. This means you'd need to pay off your mortgage with your HELOC as part of the closing. And this would only make sense if you've got enough equity to still have funds left over in your HELOC to do whatever it is you want to do next.

The equity in properties is around $200k. My properties are also under the LLC. They arent under personal name. For me paying off mortgage is not an option since current loan on the properties is way more than the HELOC draw. Would you be open to sharing your CLOC providers name and contact, if you have one..

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Philadelphia, Pennsylvania

@Henry ClarkThank you so much for this valuable information. I have started read a lot of articles/videos to address the exact questions that you have highlighted (plus some more on the financial aspects). I would defintely like to connect with you once i have done my end of information gathering.

Thank you once again.

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Hi @Greg Kasmer. How did the conversation with First Trust Bank go. Any luck getting a LOC approved?

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Philadelphia, Pennsylvania

Quote from @John McKee:

Here is the real skinny: Banks Will do Helocs on residential rental properties but not commercial properties. In the residential world a commercial property is defined by having 5 units our more. So if you have a quadplex then yes you can get a Heloc. All other types of commercial properties such as retail, office, etc do NOT have Helocs.

Thanks @John McKee. All are properties are 2-3 units. However like i said in other post, conversations dont reach that stage but instead we are told that they dont offer this product. If you have any banks/credit unions that you use, i am happy to take a referral and reach out to them

0 Votes

Philadelphia, Pennsylvania

Quote from @Jen Stekkinger:

Most banks wont give you a HELOC unless you have over 50K in equity in the property, some require more. Even then, they usually only give you around 70% of that in a line of credit. I have never heard of not doing a HELOC becuse of it being a rental, but all banks have different rules. Try using a credit union or get into one if you can. They offer lower rates and have easier terms for HELOCs. But yes many people use these lines of credit for rehab money. It is generally cheaper and easy, you just need to shop around banks and definitly credit unions.

Thanks @Jen Stekkinger. For all properties we have more than $50k equity and are ok with 70% LTV. However the hurdle we are facing that most conversations with banks / local credit unions are not reaching that stage. Based on post from Eric, i am trying to reach for first trust bank in philadelphia and see if I have any luck there. If you have any credit unions that you work with and can share contact, it'll be helpful.

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Philadelphia, Pennsylvania

Quote from @Eric Greenberg:

There was a local conversation about this a week or so ago. Hopefully some of this input will be helpful

https://www.biggerpockets.com/...

Thanks @Eric Greenberg.. That post gave me a name. .First Trust bank.. Lets see where that conversation lands. If you have any banks / credit unions that you use, and can share the contact, i would really appreciate that.

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Philadelphia, Pennsylvania

Hello all - I am sure i am not the first one to think about this, but is getting HELOC on rental properties not a thing anymore !!

I have about 7 units (mix of commerical and residential) with good cash flow on all of them. My business partner and I have spoken to about 5-7 different lenders (including one from BP) who have declined HELOC for one or the below reason

- Simply, dont do HELOC on rental (false advertising)

- They want to be primary lien on the property (not sure how that is possible). I currently have a lender and my rates are pretty good (sub 5%).

I am looking at guidance on

- Am i looking to getting into unchartered territory here !

- Are there any lenders (national or local to Philadelphia/Pennsylvania) who can help with HELOC on rental properties. Note: I am not looking to move my primarymortgage from my current lender.

1 Vote

Philadelphia, Pennsylvania

Quote from @Scott Mednick:

For back of a napkin approach, I take the existing monthly income, x12 and take 40% exp ratio to get a NOI. Then whatever the cap rate is that day divide by that. That is how the property is performing today. But, if you like value add deals............. Lets say the rent for existing 10x10 is now $60 but the market is at $100 and most units are full. Because our leases are month to month, you can see what the new value is when you use the new income. But you may some cap ex to get there or maybe not. I hope this helps you get started.

Thank you @Scott Mednick

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Quote from @Tracey Willmott:

Great podcast with Baird Kleinsmith, aka the Sultan of Storage: https://www.bestevercre.com/po... His Twitter account is also a good source of info, and he's very open to sharing his knowledge if you reach out to him!

Thank you

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All Forum Posts by: Tejas Shah

Tejas Shah has started 2 posts and replied 12 times.

Post: HELOC on Rental properties - Myth or reality !!

Post: HELOC on Rental properties - Myth or reality !!

Post: Self Storage - how does it work !!

Post: Who is doing HELOCs on investment properties?

Post: HELOC on Rental properties - Myth or reality !!

Post: HELOC on Rental properties - Myth or reality !!

Post: HELOC on Rental properties - Myth or reality !!

Post: HELOC on Rental properties - Myth or reality !!

Post: Self Storage - how does it work !!

Post: Self Storage - how does it work !!