HELOC or lien?

[Paul M.]

I heard local banks will use your equity in existing properties as a down payment for an acquisition by placing a lien on that property. In the past I have taken out a HELOC, used that as the down payment for the next property then paid off the HELOC over time. But those were 1-3 unit buildings and now I want to buy a 5+ unit residential building that might require major rehab. Which method is going to be successful with the bank? They are conceptually the same thing of course, but in practice I would like to know what will work better to smooth the application. I will be asking the banker this but want to survey before I do.

Has anyone used their equity as collateral in an acquisition, but not via a HELOC? Did they still have to put money down and what %? If you paid down your mortgage on the new property would they release the lien on the older property at some point?

I have 25-35% equity on 3 properties, 1 of which is my primary residence.

[Jeff S.]

25% to 35% doesn't sound like a lot of equity. High high do you think they will go?