Home Equity Loan vs. Refi on rental without existing mortgage?

[Patrick Braswell]

I think I'm in a pretty unique situation and am trying to figure out the right hoops to jump through to move forward.

Long story short, I'm trying to tap into the equity of the rental property passed down from my grandparents that is held in an S-corp which is co-owned by myself, my siblings, our cousins, and an idiot uncle. There is currently not a mortgage on the property, but due to the s-corp ownership, refinancing is not going as easily as I'd hoped. Would a home equity loan be a viable option in this situation, especially in regards to eliminating some of the red tape I'm running into with a refinancing an scorp-owned property?

I've been working with a mortgage broker but haven't had the chance to talk with him about this as an option yet. The idea is the product of an ah-ha moment late Friday afternoon as I was scrambling to put the pieces of this puzzle back together. I will be talking to him Monday, or possibly today if I find time at work. I'm hoping he'll have some options for me.

I know a Home Equity Loan is basically a second mortgage in normal situations, but they seem to come with less red tape from what I've found. And I know that a refinance would be the best, and most common, way to go. Interest rates between a HEL and a refi are comparable, the equity in the property is equal to the value of the property and I only need about 50% to purchase another property. I average about $2000 a month in cashflow on the current rental property, and the new property would bring in around $3500 in gross revenue. So the numbers seem to support either.

Just looking for some feedback as I continue to brainstorm a path to success.

(It should be noted that the hurdles with the refinance are not with the mortgage broker or the mortgage itself.)

Thanks! Patrick