Dallas-Fort Worth Real Estate Investor Club

HELOC on investment property?

  • 12 Jan 2017 7:40 PM
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    Message # 4545161
    Deleted user

    Can anyone confirm or deny that Texas law says you CANNOT take out or be granted a home equity line of credit on an investment property? (The property is free and clear.)

    That's what one lender is telling me.

    Thanks, Paula
    Robertson Rental Properties
  • 12 Jan 2017 7:56 PM
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    Reply # 4545182 on 4545161
    Robin Carriger (Administrator)

    Paula,

    As you know, I'm not an attorney, so this is not legal advice.  Unless the laws have changed VERY recently, and I missed the breaking news, what you've been told is incorrect.  I've had LOCs on non-owner occupied properties for a long time, and I was offered a LOC on a collection of non-owner occupied properties less than a year ago.  If you have any questions, please feel free to give me a call.

    Thanks,

    Robin
  • 14 Jan 2017 9:03 AM
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    Reply # 4548204 on 4545161
    Hiron Fernando

    Paula, you are correct in the fact that you can't get a HELOC (home equity line of credit) on an investment, since they are only for owner occupied homes. But you most certainly can get lines of credit on investment property. Visit a portfolio lender, they will be able to help you with that. They usually will give you X% of LTV of the equity you have in the property. Obviously if you own it free and clear, then no issue there. One other thing to remember, you will likely have to go through a closing to get the bank on the deed. There are closing fees associated with that.


    Feel free to reach out to me with questions or if you need ideas on portfolio lenders.


    hiron.fernando@gmail.com
  • 08 Feb 2017 11:17 PM
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    Reply # 4599631 on 4545161
    Neil Aggarwal

    Paula:

    If you can't get the banks to give you what you need, you might look into private lenders in your area.  They charge more than banks but might be a good solution to allow you to pull cash out and invest elsewhere.

    Thanks,
      Neil Aggarwal
      NSA Partners, Ltd.
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