When You Own It Free & Clear... But

[Kizzy Robb]

Hello BP, I’ve spend some hours reading different forums but I don’t think I’ve gotten a direct answer to my questions, so I’m posting it here. If I have a 2-4 MF and I own it free and clear but it needs some extensive rehab, possibly gutting it, what is the best finance options? Will my optIons vary based on if it needs guttIng or not? Will I be requrIred to put money down? If so, how much? I also own a few SF too that are free and clear. These are held in my personal name.

[Peter M.]

You could do a HELOC or cash out refi. There would be closing costs but most banks and lenders will let you roll it into the loan. You would need to provide a scope of work and budget and those will be taken into consideration for the appraisal. You shouldn't need to collateralize your other properties unless the renovation would cost more than the LTV the bank will give you. Is your goal to sell it or make it nicer and raise rents? It won't really matter to the bank but it will matter on how much money you want to ask for.