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Author: Mark Ainely | Partner GC Realty & Development & Co-Host Straight Up Chicago Investor Podcast
If you bought or refinanced investment property between 2020 and 2022, there’s a good chance you’re sitting on something incredibly valuable — not just equity, but cheap debt. And most investors don’t want to touch it. They locked in rates in the 2–3% range and now refuse to refinance, even when they want to buy again.
That’s the exact problem we dig into on this Straight Up Chicago Investor Tuesday Tip episode.
Mark and Tom sit down with Ben Stef, a lender who’s quietly helping investors unlock equity without refinancing, without killing their low-rate first mortgage, and in many cases without traditional income verification.
If you’ve ever said, “I’ve got equity but no good way to use it,” this episode is for you.
Why So Many Investors Are Stuck Right Now
We hear this all the time from Chicago landlords and suburban investors:
- “I’ve got $200K–$400K in equity”
- “My rate is too good to touch”
- “Banks won’t lend because the property’s in an LLC”
- “I don’t have W-2 income anymore”
Equity has become trapped capital.
And while most people assume the only option is a cash-out refinance, Ben explains that there are two HELOC paths most investors don’t even know exist.
The Two HELOC Paths Most Investors Miss
Ben explains it as a simple decision tree:
Option 1: Non-LLC / No-Appraisal HELOC
This option works when the property is owned personally (not in an LLC).
Key highlights:
• No appraisal
• Funding in as little as one week
• Uses alternative income verification
• Business bank statements often qualify
• Rates generally in the 7–10% range
This is ideal for investors who want speed and have some verifiable income flow.
Option 2: DSCR HELOC for LLC-Owned Properties
This is the one most investors don’t realize exists.
Ben calls it a DSCR HELOC — essentially the DSCR loan logic applied to a line of credit.
- Property can be owned in an LLC
- Multiple partners allowed
- No personal income verification
- Up to 4-unit investment properties
- Underwritten based on property cash flow
- Line of credit — not a lump-sum refinance
This option solves a massive pain point for Chicago investors holding assets in entities.
How Long Does This Actually Take?
Traditional banks are slow. Entity loans are even slower.
- DSCR HELOCs typically close in 20–30 days
- Appraisal, title, and a bank statement — that’s it
- No endless underwriting loop
For investors chasing deals, that timeline can be the difference between winning and missing.
Yes, the Rates Are Higher — and That’s the Point
This is where many investors get hung up.
DSCR HELOC rates generally land around Prime + margin, often 10–11%.
But Mark makes an important point:
This is not permanent financing.
It’s a tool — like bridge debt or hard money — except:
- It’s backed by your equity
- You control when you draw and repay
- There are no prepayment penalties
- It can be shown as proof of funds
Used correctly, it’s a short-term accelerator, not a long-term burden.
How Investors Actually Use These HELOCs
This isn’t theory — these are real use cases investors are executing right now:
- Buying properties cash, then refinancing later
- Funding value-add renovations
- Fronting insurance or emergency capital
- Buying out partners
- Acting as their own private lender
- Having capital ready before a deal hits
As Ben puts it — liquidity wins deals.
Loan-to-Value Rules You Need to Know
For DSCR HELOCs, the combined loan-to-value (CLTV) depends on how long you’ve owned the property:
Minimum loan amount is typically $75,000.
These HELOCs fund at closing — they are not zero-balance credit lines.
Important Draw Rules (Don’t Skip This)
- You must draw 75–80% at closing
- You must maintain 90% of that balance for the first 90 days
- After day 91, you can pay it down aggressively or off entirely
- You can pay the balance down to 10% immediately
- Still no prepayment penalties
This means you should have a plan before opening one — offensive use works best here.
Why This Matters for Chicago Investors in 2026
Inventory is tight. Deals move fast. Sellers want certainty.
Having a HELOC:
• Makes you look like a cash buyer
• Gives you speed without selling assets
• Lets you scale without refinancing golden debt
• Acts as both offense and insurance
It’s not about using it recklessly — it’s about having it ready.
Questions We Answer in This Episode
Q: Can I get a HELOC if my property is owned in an LLC?
Yes — DSCR HELOCs are specifically designed for LLC-owned properties.
Q: Do I need W-2 income?
No. DSCR HELOCs rely on property cash flow, not personal income.
Q: Is this better than a cash-out refinance?
If you want to preserve a low-rate first mortgage, absolutely.
Q: Can this be used as proof of funds?
Yes — and that alone can win deals.
Q: Are there prepayment penalties?
No. These are flexible, short-term tools.
Show Notes & Timestamps
00:00 Why trapped equity is becoming a bigger issue
01:12 Two HELOC paths most investors don’t know about
02:45 DSCR HELOC explained for LLC properties
04:10 Why refinancing low-rate debt is a bad move
05:35 Rate structure and draw periods explained
07:10 Using HELOCs offensively vs defensively
08:45 Emergency liquidity and insurance claims
10:15 LTV rules and seasoning timelines
11:40 Required draw rules and early payoff strategies
13:05 Buying deals faster with proof of funds
15:10 Final advice for investors considering HELOCs
Guest Information
Company: NEXA Mortgage
YouTube: https://www.youtube.com/channel/UCYZIjA6JcV0DqLD-1q2iZbQ
Takeaways for Chicago Property Managers & Investors
- Equity doesn’t help if it’s trapped
- Low-rate debt is an asset — protect it
- DSCR HELOCs solve LLC lending problems
- Speed and liquidity win deals
- This is a tool — not permanent financing
Because finding good tenants and property management shouldn’t feel like online dating.
Dear Investor,
If you are an investor in either the city or suburbs of Chicago, I would love to speak with you about how we can help you on your real estate journey. At GC Realty & Development LLC, we help hundreds of Chicagoland real estate owners and brokers each year manage their assets with both full service property management and tenant placement services.
We understand that every investor’s goals are unique, and we love learning about each client’s individual needs. If there is an opportunity to help you buy back your time by managing your rental property or finding quality tenants, please check us out.
Founder, Partner, Podcast Co-Host, and Investor
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