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Updated almost 6 years ago,
Appraisal needed for HELOC?
Hello,
About 7 years ago, I purchased a condo from a family member for $50k and after living in it for the first few years, have been renting it out since then. Based on what I see the other units selling for and the condition of that property, my unit should be able to sell for about $125k. I'm trying to figure out the best way to tap into that equity to fund BRRRR investments going forward and one of the options I'm considering is a HELOC.
My question for BP is: what value of the property should I expect a lender to allow me to borrow a % of? I haven't paid for an appraisal on the property since it was purchased years ago so I'm not sure if I should expect to borrow ~75% of the $50k I paid for it years or something closer to its actual market value. From what I understand, HELOCs don't require an appraisal so does the lender just use some other tools to approximate the property's value?