HELOC came back lower than expected

[Thomas Ebenhoch]

Hello all, I own a three unit building that I purchased in 2016 with a 203k loan for $157,000 total with renovations included. I've done a good amount of renovations: siding/soffits/fascia, gutters, replaced all concrete work, repaired and refinished porch, all baths and kitchens, refinished hardwood floors, full paint job, landscaping ,etc. I live in one unit and rent the other two, a 3br/1.5 ba for $1200 and a 1br/1ba for $700. The unit I live in is a 2br/1ba that would rent for $950-1000. So, $2950/mo and $35,400/yr total rent roll fully rented. I'm in the process of taking out a HELOC on the property to fund some other investments and the appraisal came back lower than I expected, $216k, which would only allow me a $25k LOC. There are multiple unit buildings recently sold and on the market for $250+. I was hoping for around 50k and I requested an appraisal review. Am I wrong in thinking that the appraisal is way low based on the income of the property? I used my local credit union, does anyone have a good recommendation for a lendor? I would appreciate any advice regarding the Heloc/appraisal process and hope that this can start a discussion.

[Brent Coombs]

@Thomas Ebenhoch, the income it generates will have zero effect on their appraisal (because, it's not a commercial 5+ unit building). And my guess is they can prove there's been other recent sales similar to their appraisal. I don't have the answer as to whether worth appealing or not.

[But, their acknowledged 37% increase in value in just 2 years is something to be proud of!]

I'm not surprised that HELOCs don't allow the same percentage LTV as the 96.5% you got originally, and I reckon neither should you be.

I suggest: Squeeze good value out of every one of those $25,000 dollars they're offering!