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apartment building equity line


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#1 powie11

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Posted 09 November 2004 - 05:39 PM

Dear Whoever,

I live in a six unit apartment buiding which I own. I owe $70,000 on it and it's worth about $270,000. I would like to get an equity line on the property. I occasionaly buy, fix up, and sell single family homes. I would use this line for this purpose as it would be much easier than getting a mortgage on a property and then selling it six months later, or financing it with credit cards.
There just doesn't seem to be that many lenders for this type of loan. I also own a single family home that I rent out that has about $70,000 worth of equity. I am looking for a line from about $100,000 to $150,000.

#2 loanuniverse

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Posted 10 November 2004 - 10:26 PM

You are having trouble getting this done because lines of credit are not usually done for rental property {this does not mean that they are never done}, I have underwritten a couple in my time. It just means that it is not usual.

While I understand the benefit from going with a line since you will not have to pay interest unless you are using the money, you might have to consider refinancing and cashing out the equity and just resign yourself to paying the interest from day one.

You really are going to find it hard because a lender is going to want to see amortization, which is not present on a line of credit. In addition, the line commitment will be for one year and will most surely carry a 1% fee per year.





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