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Updated about 7 years ago on . Most recent reply

203k load and equity. Is my plan fool proof?
Hello, bigger pockets community. I am starting out my real estate investing career, and I have a great plan.( or at least that's what I think). So the numbers below are raw, and they do not represent the exact values of the property, they are just to set an example.
So If I go and buy my multifamily unit for $50000, rehab it for $30000. Now the dwelling is possible worth $100000-120000. Because I only borrowed 80000, my equity is now about 20000-30000. Of course minus interest and everything else that goes into a loan.
Now, is that equity mine, and would I be able to use it to get an equity line of credit ? I hope to make a deal like that, and use an equity line of credit, to get a second unit as soon as possible.
If somebody has experience with 203k loans, and has free minute, please respond, because I cannot find an answer on the web.
Thank you all so much, for all the inspirations and ideas. Love this forum
Most Popular Reply

- Real Estate Professional
- West Palm Beach, FL
- 13,510
- Votes |
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@Ivan Dushchenko What you seem to be misunderstanding is:
You can get a heloc for up to 80-90% of The Value Of The Property, Less Your 1st Mtg.
You can Not borrow "80-90% of the equity itself".
Simple example:
$100k property
$70k first mtg
Equity = $30k
80% heloc= $80k (80% of value) less existing $70k mtg=$10k can be borrowed (not 80% of $30k)