After reading some real estate investing books, I decided to take a bunch of equity out of our investment properties and either use that money for other real estate investments or possibly starting a fixed Universal Life policy as a tax free investment (not necessarily for the death benefit). I've always been skeptical of life insurance policies, so this was not an easy sell, but this book does a great job explaining the advantages.
Anyhow, I've now talked to all of the banks I normally do business with including, Washington Mutual, America First Credit Union, and Aurora Loan Services, and Countrywide. Guess what? You guessed it, the mortgage crisis we are in the middle of has caused banks to go to the other extreme and stop offering Home Equity Line of Credit (HELOC) loans on non-owner occupied properties. It simply does not make sense to me that a bank would be unwilling to loan me money on an investment property if I clearly have tens of thousands of dollars of equity in the home, especially if I'm not even reaching the 80% loan-to-value (LTV) ratio that most banks prefer to stay at or below. I've even heard of some banks lowering the limits on existing HELOC loans without even contacting the homeowner. I guess I may just need to hold out until this crisis is over.
