Acquisition funding

I am looking to start rehabbing. I have a 750+ FICO and 27k in equity. I have a partner and we obtained a 50k LOC from a major bank (also a M/C for rehab expenses) but I would like to add to that so we can purchase properties in the 100k-120k range (max profit potential in my area). Should I try another LOC from a different bank? We can qualify for a mortgage, but this seems like an inefficent way to finance (as does hard money). No source for finding investors. Any suggestions?

ck with

  1. National Cities (aka Accubank)
  2. Community Commerce Bank

They will normally lend on 70 -75% of the finished ARV… usually that is 100% financing if your profit is 25 -30%…

What is so inefficient about getting a conventional mortgage and using the LOC for repairs?

on a noo property, you can get a heloc for 80% ltv depending on the bank. if the heloc is on an oo property you may be able to go upto 125 or 150%, with higher interest rates. if you have credit cards that have enough of a credit limit, you could get the cash from those also. i recently purchased a property using credit cards and some cash(mostly from the credit cards though), and then got a heloc from a local bank. eventually you might want to look into getting a blanket line of credit from the commercial side of a small local bank.

OPM= Other Peoples Money: why tie up your own capital to finance repairs when you can you that money to tie up other properties in additional purchases…

Thanks for the replies. I wanted to avoid mortgages because I feel it will hurt my credit score, which is pretty good now (if I flip 1-3 houses a year thats a lot of inquires/loans and extra debt). The LOC I have now is a busn line on the partnership (not my direct credit, just guaranteed, which is ideally how I would like all the debt to be), but is only 50k. I got that on my score alone since the partnership is new w/ no history. I think I could get it up to 100k after I flip a few and have busn income to show. I live in Texas and HELOCs are illegal on NOO houses.

Do most of you use mortgages? Thanks!