A friend of mine and I currently hold a 40K condo free and clear through a LLC.
I have a potential buy, of a second property that I would like to do for 25K.
We just rented property #1(after a massive $$ ordeal), so I have essentially no savings in the bank.
What would be the best way to use my equity to purchase the 2nd property.
I'm thinking a HELOC would give me the best options, and I'd have access to that money in the future(with low cost of setup).
I'm open to ideas.
You can either do a cash out refi or a HELOC. with the property being held in the LLC you may run into issues on the residential side of things and may need to have conversations with commercial lenders. You would also need to get your partner involved sine likely the note would be in the LLC name and he would be jointly liable to pay it back
You could pledge that property as your down payment for both purchase and rehab of property number two. Either 1 or two separate notes through a portfolio lender. Get property two up and running, secure financing on both and have funds left over to look for number 3.
@Brie Schmidt has some valid points to consider.
But you can also use a HELOC, take the cash out, then loan it to your LLC at an interest rate that art least covers your HELOC interest (plus a point or two if you see fit). Check with your accountant.
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