I recently purchased my first property a few months back. It is my primary residence and I am renting out a room in my unit while renting out the upstairs (which covers all my property costs). I did a rehab of the home upon purchase, but have not had it reappraised yet, but I do believe I have added about 40-50k to the value of my property after renovations.
I work 4 days a week at a different city and have been paying rent there for the past few years and am now looking at reinvesting at a new property in this area for a house hack.
Would it make sense for me to get reappraised and increase my amount of equity and use a HELOC?
Just looking for advice, fairly new to the game.
Hi Justin, that's what I did. Setting up the HELOC had no upfront fee including appraisal handled by the bank so it just made sense to do it even if I don't use it and close it in 3 years. Now I am waiting for the right opportunity to use the HELOC as down payment or "cash offer" depending on the amount for my targeted property.
I took a HELOC out on my primary residence and I am currently using it to partially fund the down payments/closing costs on two investment properties. It is definitely a valid strategy. Just be aware that you will be paying interest payments on the balance you carry on the HELOC which turns into both principal and interest payments after the draw period if you haven't paid back the balance by then.
Yes. The lender appraises the property as part of the determination of whether the application will be approved.