HELOC to Fund Commercial Multi Family Apartment Purchase?

HELOC to Fund Commercial Multi Family Apartment Purchase?

Investor · Chicago, IL · Member since 2017 · 22 posts · 0 votes
Hey guys, 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? or 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!!
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  • Investor · cary, NC · Member since 2008 · 27 posts · 7 votes
    9y
    Take HELOC to fund this property and another. Rates are low right now.
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