Are there any banks giving HELOC loans on investment property with sufficient equity?

Asked by Todd Kevitch, Boynton Beach, FL Fri Mar 6, 2009

Have friends looking to begin purchasing investment properties. They owe about $75K on a property worth $260 in today's market. They're looking to get a $100K line of credit. Do these products still exist at reasonable rates?

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Louise Warri…, , Lake Mary, FL
Fri Mar 6, 2009
Hi Todd -- I recently inquired about getting one on an investment property I own and was told that the amount of all loans against the property couldn't total more than 40% of the value (and the rates were pretty high since it wasn't owner occupied.)--i.e., they wanted 60% equity to remain with the property after granting the new loan. Your scenario won't support this.

My suggestion would be to contact their financial planner. If they have some assets, and they have good credit, some brokerage firms are loaning money at pretty good rates (unfortunately, though, they're adjustable....) It's not easy nowadays to increase your real estate portfolio unless you have a lot of ready cash (or very low debt/earnings ratios). The old adage "it takes money to make money" couldn't be truer than today.

Good luck.

Louise Warring
Coldwell Banker Residential Real Estate
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Mott Marvin…, Agent, Sunny Isles Beach, FL
Fri Mar 6, 2009
I would check with a commercial lender in the neighborhood. Banks can and do make loans to qualified people with qualifying properties. Even in this turbulent market- loans are being made.

HELOC, by virtue of its name is a "Home" Equity Line of Credit. Hence, I would think that "investment" properties would be exempt.
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