How does the Investment Property HELOC work?
With our program, you apply for the Investment Property HELOC based on your existing portfolio equity before looking for new rental properties or deciding to rehab a property. Our program is intended for investors who fully own one or more rental properties. These properties are the security for the Investment Property HELOC. When you take a draw against your line you can use the money to purchase you next property, rehab a property, or for any other purpose. When the line is put in place we acquire a 1st lien position on your applicable properties to secure your home equity line of credit. During the application process, we obtain appraisals on your existing properties (at your cost) and you can access 60% to 70% of the equity in these properties during the annual term of the line of credit. Please note, however, that our Investment Property Home Equity Line of Credit is not exactly the same as a HELOC on your primary residence.
Our program is similar to commercial bank lines of credit that are set up on an annual basis, have adjustable interest rates, and have annual costs. We do not charge an origination fee for setting up your line of credit and instead charge a 1.5% fee every time you draw against your line (with a minimum $50k per draw). We are also a mid-size business and we intentionally do not have large amounts of capital sitting idle waiting for a client to use/not use. To make sure that we keep our funds fully invested, a borrower must provide us a 60 day window/notice period in which you plan to access your line of credit and an estimate (within 10%) of the amount you plan to access. The idea is to make sure these funds are available during the window in which you plan to access your funds. If you have an unexpected need to start a draw in a shorter time period, let us know and we will see if we can line up funds on a good faith basis (but we cannot guaranty that we will have funds available for these type of short notice requests). Upon receipt of your notice, we will confirm that funding is available and set this amount aside for your use. If you decide not to use your requested draw, you will incur a non-use fee (because we incur the costs associated with the un-deployed capital).
The main benefit of this program is that you can use your draw for any purpose (even personal reasons) using the equity in your fully paid off investment property. If you don’t have a fully paid off investment property but would still like to have a line of credit to purchase or rehab properties our Investment Property Line of Credit Program may fit your needs. Please note that this program is available in 43 states and it does not come with the pre-notification requirements of our Investment Property HELOC program.
A Rich Portfolio of Investor Programs
At Hurst Lending & Insurance, we believe in building investor mortgage programs to solve a diversity of problems. These programs address situations we encounter as lenders and while building our own portfolios. Along with the Investment Property HELOC, we have a Hard Money Loan program, created for flipping properties, and a Low Down-Payment Investor Loan program, created to avoid PMI payments while still securing a low-rate conventional loan. If you questions on the best next step in building your portfolio, don’t hesitate to contact us today. One of our favorite parts of being lenders and investors is helping other investors leverage tools already available to increase the value of their portfolios.
Please note: This is a proprietary loan program that is exclusively offered by Hurst Lending & Insurance.