How to get a HELOC on a multifamily?

Question

HI my name is Vinent,  I like to know  how to get a a HELOC on a multifamily. This is my problem,  I  had a bankruptcy over 4 years ago.  I purchased the property with the help of my parent 2 1/2 years ago.  They loaned me the money and paid cash for the property.  I completley rehabed the entire property and the property appreciated over 50%.  There is no loans on the property, the property has a rental income of 3,500 a month and a bank won"t even consider me for a HELOC.  I would like to borrow only 50% of the valure to try and find another one.  Any suggestions would greatly be appreciate.

Colleen F. · Answer

One bank or  a lot of banks?   local banks may be  better for this kind of thing. If you have a loan from your parents though and you mentioned this to the bank well  a bankrupty too they might not like that.   They may want to see the property performing for a while.  How many units?    4 or less they will value it by the property value in the residential market with comps-- with your personal guarantee on the loan.  5 or more they will value based on the property performance and maybe also your personal guarantee.

Eva Salas · Answer

@Neil Aggarwal No, you're right. On an apt bldg would be a commercial LOC.

Neil Aggarwal · Answer

I always thought HELOC was only for your primary residence. Am I wrong?

Brie Schmidt · Answer

@Vincent Matraxia - A HELOC has the same financial requirements as a loan.  If the property has been stabilized for a few years you may be able to try a commercial loan, which is based more on the performance and less on personal finances.