HELOC question

[Jeff King]

If you bought a house for say $10K cash and the appraised value is $40K could you immediately take out a HELOC? Or do you have to wait a year?

[Jodi M.]

Not sure on the HELOC because we owned the house we use for a couple years when we started. We get our construction/repair financing by either refinancing a house with equity or we take out a construction loan. On the construction loans our bank has an appraisal done for the after repair value and will loan us up to 80% of that. Currently we are doing one with an ARV appraisal of $76,000. We bought the house with the equity in one house and asked for a $35,000 construction loan towards a complete rehab. Had no problems, the house closed and the construction loan which had already been approved was ready a week later. Good luck!