Commercial Equity Line of Credit (CELOC) and HELOC questions
Hi guys,

A relative of mine is in a unique situation owning a mix of commercial and residential investment properties outright. I’m sure this is going to be determined by your relationship with your bank, but does anyone have any experience with commercial equity lines of credit + HELOC? 

Seems like it would be a good situation to have this credit available rather than going through the typical loan process to close deals quicker or other unique opportunities. 

I also have some additional questions:

Is something like this possible?

What would rates look like? 

Typical LTV bank would be willing to do?

Is it possible to pool all of his commercial and residential properties to receive a lump sum line of credit ?
[{"id": "hrk60k9", "text": "I don't know what others have, but our RELOC is as follows:\n\n$11MM revolving line of credit\nInterest rate at WSJP - 0.50%\n50% LTV\n\nYou should be able to pool properties together. I have seen it while working for a lender.", "replies": [], "depth": 1}, {"id": "hrkf0ld", "text": "Pool commercial and residential? Likely no.\n\nCan you get a revolver secured by commercial real estate?  Yes, but that is typically when you are looking for a $50+ million facility.\n\nMost banks would probably top out at the lesser of 65% LTV or a coverage test.", "replies": [], "depth": 1}, {"id": "hrl1ole", "text": "So yeah it is possible but you probably won't like the terms.\n\nBanks frown on lines of credit secured by commercial real estate for a couple reasons:\n\n1. Utilization - if you don't use it the bank makes no interest margin but still has to set aside capital reserves. If you max it out your getting IO terms on what probably should be an amortizing debt (stabilized property) and they aren't receiving and principal (risk) reduction during the term\n\n2. Use of funds - once it is in place the bank has little to no control over what you do with it. This is particularly troublesome if the money ends up in an area the bank wouldn't lend for normally (buying securities, making private notes, investing in a marijuana business, etc.) and some people decide to live large out of them because you can now double dip (cash flow plus line availability).\n\nThat being said it if you have a good relationship with a lender you can absolutely get one but it's just a commercial line of credit, residential investment or not if you don't live in the property it's not a HELOC. \n\nYour primarily limiting factors are LTV (probably 60% or less) and some DSC limit on the underlying collateral for sizing.  The sizing might be a 1.25x coverage on some assumed amortization; 15 or 20 years would be my guess but amortization and desired coverage depend on the lender appetite. YMMV\n\nTerms of 1 to 5 years but 2-3 are common. \n\nYou'll have to get all the collateral appraised and recorded on so whatever your local taxes, title, and fees to do so.\n\nExpect an upfront fee because of the margin issue above (50 bps +/- 49 bps).\n\nDon't put it in the collateral pool you intend to sell or get the applicable release provisions hammered out up front.", "replies": [{"id": "hrmh7wz", "text": "Would also add that the Bank will charge fees for having to order appraisals on the collateral each time it renews. If OP really wants to do this, there is probably some community bank desperate for deal flow that may approve it. However, most prudent credit officers would turn down the request unless it was an \"accommodation loan\" for a high-profile, profitable client who already has a full banking relationship with them.", "replies": [], "depth": 2}], "depth": 1}]