I have an itch to tap into a HELOC that I cannot scratch.

[Alexander Gonzalez]

What can I say?

I’m itching to get started with this real estate investing thing you guys keep talking about.

A family member overheard me talking about investing in real estate with little to no money down. They expressed a good deal of interest in some of the investment strategies I was talking about, mainly the powerful and wise vehicle that the Home Equity Line of Credit Can be. I know that they have a good amount of equity tied to their property after they shared their purchasing price with me.

According to the Zestimate I pulled on Zillow, there could be over 100k in equity on the property. I understand the Zestimate can be and most likely is a generous estimation, regardless of the fact, there is enough equity tied into the property to be more than helpful.

But the plot thickens.

Since owning the property they have made several of upgrades to the house. HVAC, roof, bathroom remodels, square footage additions, etc.

Sounds great right? And it is.

Except all of the additions and upgrades to the house were done without any permits.

With all things considered, I am concerned and curious that if we were to proceed with pulling a HELOC, would the assessor sent by the bank ring a bell when they see that the house has had upgrades done without any legal permits?

The last thing I would want to happen is that I promise a family member a good return on their investment and then end up in a situation where they have to tear down a part of their residence because the assessor dinged them for having made additions to the house without the legal permits in place.

So, BiggerPockets......

Has anyone found themselves in a similar situation?

Does the assessor have any connection or legal responsibility to report un-permitted additions to the city?

Should I walk away and refocus my efforts in raising private capital elsewhere?

Thoughts?

Comments??

Any bit of input helps.

Thank you guys for fostering a community where these sorts of questions can be asked.