Don't let fear stop you from making a decision that can improve your life.

If you can qualify for conventional financing, a HomeStyle Renovation loan by Fannie Mae will let you do property improvements and not need to do a refinance once completed! 

UDFI typically arises when debt is used to acquire or improve income-producing property, and the proportion of income related to the debt can be subject to UBIT.

They usually say its for home improvement.

- Local Development improving the area?

Sure there are people who have done it but like Joe mentioned above is why your rate on HELOC is probably higher than your first mortgage so you'd only do it if your balance is really low and near the end of your term anyway so you're just getting it paid off quicker (like the last 1-3 years of payments left) becaues you want to get ride of the monthly payment and improve your cashflow now versus later.

I want to improve them a bit and rent them out as much as possible.

Reinvest whatever money you save on taxes via depreciation back into more real estate or property improvements to continue increasing the size and quality of your portfolio.4.

Reminder:Ground improvements qualify for bonus depreciation.This includes various landscaping.Roads and external parking areas.Sidewalks and pathways.Fences.Utility systems (including the installation or improvements to water, sewage, drainage, and electrical systems).Outdoor lighting.Rec facilities (like playgrounds, sports courts, and swimming pools).And more.It's a big category for depreciation/bonus depreciation that we love.

Before a walkthrough and before signing a contract is it appropriate to ask the seller of a small multi family for:1.Rent Roll2.Property Tax Bills3.Utility Bills (last 12 months) (landlord pays all utilities)4.Income & Expense Statements (summary)5.Lease Agreements (Sample or Overview)6.Recent Maintenance Records (summary)7.Capital Improvements Summary