A few years ago I bought a foreclosed triplex for about $150k. After extensive rehab work, I moved in to one of the units and rented out the other two. Soon after I began the process of a cash out-refinance (new mortgage is $172k) so I could rebuild the garage and rent out parking spots for extra income; the property was now valued at $260k.
Fast forward a few years to today where 2 friends and I are in early steps of creating an LLC. We have decided to go into commercial rental properties and have set a price limit for what we want to purchase. That being said, I am going to be about $10k short for my third of the cash.
My estimate is that the my current property is now worth $275k because the garage was unusable during the cash out-refi appraisal. My credit score is over 740. Cash flow on the rental units is very good. Overall debt/income ratio is in great standing. All debts from rehab work are paid off.
My partners and I want to purchase a property every 8-12 months for the next 3-4 years.
Would you recommend a HELOC for the amount I'm short? A little more since the commercial lenders want to see leftover cash after approval?
Should my HELOC amount be a larger portion of the equity I have so I am in good position for future purchases?
Any advice is greatly appreciated!!
Take HELOC to fund this property and another. Rates are low right now.