HELOC and Property Values

[Derek Askew]

Hey BP community, 2 Part questions with a bit of a background story:

Wanted to get a grasp on HELOC's and property values. I have about 25K of equity on a duplex I'm house hacking.

I have the property under an LLC and I pay rent to my LLC plus my unit and garage tenants. The property grosses 2.4K/mo in rent between (myself,garage, and unit I'm renting out)

Question 1:

When the fair market value increased the garage nor extra unit were rented out. Will this have a significant impact on the equity?

Question 2:

What is the minimum amount of equity needed in a house before a HELOC would make sense to pursue?

All suggestions/recommendations will be appreciated. Thanks in advanced BP community.

[Jaysen Medhurst]

@Derek Askew, congrats on the house hack. Regarding your questions:

1. $0. The value of your property has nothing to do with the income it generates. Since it's residential, its value is based on comps.
2. It's not really a matter of amount of equity. Fees on HELOCs are very low, so it's not like you have thousands of closing costs to consider. That being said, many lenders won't go above 80% total LTV. Those that do usually charge higher rates the closer to 100% LTV you go. How much is the property worth? What's your current LTV?