Sell, HELOC, or Mortgage Brooklyn Brownstone 3 Unit
I posted something similar in the Starting Out forum and did not get many responses.
I was hoping to get the advice of more seasoned professionals who know the area. My family has a 3 unit investment property in Cobble Hill Brooklyn NY which has appreciated from $40k when my parents bought it to about $3M today. The mortgage has been paid off for many years and it currently grosses $6,300 a month. My parents live in Boca Raton Florida and just collect the rent checks every month with minimal upkeep.
I was thinking of getting a HELOC on this investment property. I was able to find a credit union who would do a 5 year draw and 15 year repayment for 4.75% up to 70%LTV, 5.75% up to 80% LTV and 6.75% up to 90% LTV with no maximum cap on the amount as many banks that I researched seemed to have.
Another option would be to get a nonconforming mortgage from a portfolio lender. Most banks will lend up to $1.1M as a conforming loan but there is still lots of untapped equity if I go this route.
My parents would prefer to keep the property as the area has good renters and continues to appreciate. Besides, the NYC market is slowing and I dont know how fast this property would stay on the market if we did sell.
I feel there is lots of money trapped in the home equity and I want to put it to good use by acquiring real estate elsewhere. I'm very familiar with residential real estate (1 to 4 units) but I think we would be able to use this large sum of money and get into commercial multifamily properties. Alternatively, with a HELOC, I could buy smaller properties for cash and then use the BRRR strategy.
I'm looking for buy and hold (and not flips) and I'm open to investment areas (preferably in the tri-state area but if I can find good cash flow, I'd be open).
For those of you who have done similar transactions, what's the best approach? What has worked for you?