Stop me if you’ve heard this one before.
A real estate investor really, really wants to grow their portfolio.
They look at their current equity, and think to themselves, “if I could just get some of this equity out, I could buy a couple more properties!”
So they start inquiring around town…with no luck.
Pretty soon, they log into their online forum and make a post asking a question that sounds a lot like this:
“Anyone know of a bank that does home equity loans on investment properties? I’ve called like 8 banks and they don’t do it.”
Then, predictably, one or two people respond with comments like this:
“Yeah, there’s this one bank, but they’re the only ones that do it.”
When I see this I cringe–I hate to see my fellow real estate investors suffering unnecessarily by not being able to access that equity to grow their portfolios.
So what is the solution?
Well, to understand the solution, first we have to identify the problem:
When we limit ourselves to sourcing what we need from one location–because that’s the only location we know of–we do ourselves a big disservice.
More literally: when the only source we know for loans is banks, we limit ourselves.