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Apartment building owners face roadblock with equity loan

Second mortgage would pay for needed repairs
Published on Aug 3, 2005

DEAR BOB: My husband and I have a little realty problem. Can we obtain an equity loan on our four-unit apartment property and will the interest be tax-deductible? We want to use the money to improve the property. But our community bank, where we've banked at least 10 years, refused our request although we have great credit and keep substantial deposits – Kim W. DEAR KIM: Dump that bad bank. If you have great credit and have kept substantial deposits for more than 10 years, your bank should roll out the red carpet for you. Purchase Bob Bruss reports online. Presuming you have adequate equity in your small apartment building, you should have no trouble obtaining a second mortgage to pay for improvements. When you obtain an equity loan – known as a second mortgage – on your apartments, the interest becomes tax deductible as an ordinary and necessary business expense. For more details, please consult your tax adviser. HOW SOON CAN $500,000 TAX EXEMPTION BE USED AGAIN?...

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