The Money Mustache Community
Learning, Sharing, and Teaching => Real Estate and Landlording => Topic started by: sammybiker on April 12, 2018, 12:11:39 PM
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Best investment property line of credit options?
I'm getting prime + 1.75 from Huntington.com, interest only payments.
Anyone see anything better?
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Guardian/Union savings if they are in your area. PNC is also worth a look. 5.5% for PNC as of last I looked.
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Thanks, calling them this afternoon.
*Guardian doesn't serve my county and PNE came back w/only primary residence LOC, won't touch investment properties. Thanks again though for the suggestions.
Anyone got anything else?
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You might try PNC business banking. We have had a PNC LOC for 10+ years or so through our LLC. It is very useful to have I think. We use it to finance repairs on houses we flip at times.
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Thanks for the added info. PNC business was good to speak with but they don't want to touch single family, looking only for commercial at this time.
Still looking. PenFed has been a great option but they don't want to touch me if I have more than four investment properties, regardless of their mortgage status.
Re: Huntington, they will only give me a single line of credit, nothing more.
Interesting stuff, never thought it would be so hard to get a LOC on paid off, cashflowing, well seasoned single family assets.
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That must have changed of late, we have had the LOC for a number of years so perhaps they figure it is a good risk. Since I bank at PNC for both business and personal accounts, I am sure they peer at income and outgo every year before renewing it. It does seem odd that a small RE investor can't easily borrow against a bunch of cash flowing houses but some genuine garbage bonds and debtor in possession finance deals happen every week on a grand scale. The solid case can be made for ditching the mortgage before ditching the job though some consider it heresy. I say whatever (in a Valley Girl voice) :)
https://earlyretirementnow.com/2016/11/02/why-would-anyone-have-a-mortgage-and-a-bond-portfolio/
https://earlyretirementnow.com/2017/10/11/the-ultimate-guide-to-safe-withdrawal-rates-part-21-mortgage-in-retirement/
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Thanks for the links and yeah, it doesn't make much sense.
In follow-up, navyfed credit union came through for me yesterday at prime + 1.25 w/a .25 discount available for automatic payments. They'll only give me (3) LOC but that will be sufficient. 70% LTV, which is a little lower than I wanted but still adequate.
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Good to hear that, happy landlording!
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One last update for those who find this thread in the future - I did get a local (Ohio) commercial bank to agree to provide a LOC with the following terms...
- They are OK with me being out of state
- prime + .5 (best I found in calling over 20 national & local banks) - payments were interest only
- LTV of 60%. I felt this was negotiable, maybe able to get them up to 65%.
- They would basket multiple assets into one LOC
The LTV was not great but was offset by attractive rate.
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"They would basket multiple assets into one LOC"
I would not cross-collateralize... One property per loan. If the SHTF, only one property is at risk.
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Thanks AR for the input.
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One last update for those who find this thread in the future - I did get a local (Ohio) commercial bank to agree to provide a LOC with the following terms...
- They are OK with me being out of state
- prime + .5 (best I found in calling over 20 national & local banks) - payments were interest only
- LTV of 60%. I felt this was negotiable, maybe able to get them up to 65%.
- They would basket multiple assets into one LOC
The LTV was not great but was offset by attractive rate.
What bank offered this? Thanks for the help!
Sent from my iPhone using Tapatalk
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Farmers & Merchants State Bank
Speak with Logan Frey lfrey (AT) fm.bank
One last update for those who find this thread in the future - I did get a local (Ohio) commercial bank to agree to provide a LOC with the following terms...
- They are OK with me being out of state
- prime + .5 (best I found in calling over 20 national & local banks) - payments were interest only
- LTV of 60%. I felt this was negotiable, maybe able to get them up to 65%.
- They would basket multiple assets into one LOC
The LTV was not great but was offset by attractive rate.
What bank offered this? Thanks for the help!
Sent from my iPhone using Tapatalk
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Thank you!
Sent from my iPhone using Tapatalk