Now that I got my first property all rehabbed and rented out I am thinking about my 2d property.
What is the best way to do it?
Background information:
I have about 16K into the first house on a personal credit card that is 4% interest for 3 years and then goes to 13%. I purchased the house under a LLC.
I set up the 16K purchase and rehab as opening equity on the LLC. So I want to go in as LLC and get a HELOC loan to purchase the 2nd house to start this going. The comps have been 58K. The last sell date before me was Feb 2008 for 40K.
So what does everyone think. What is the best way to attack this?
Thank you in advance for all your wisdom! :biggrin
Are you planning the HELOC (Home Equity Line of Credit) on your personal home or on your rental?
I don’t know if anyone is doing lines of credit on rentals just now. Why don’t you put together a couple of simple but nice spread sheets showing what you did with the first house, and what you want to do with the next. Now go visit your local hometown banker. Call first and get an appointment.
If they like you and your plan they may set up a business line of credit for you. It’s time to get professional banking advice and go to the next step. Let the banker give you advice on how to get funds.
Good luck, and keep us posted.
Furnishedowner
Looking at doing the rental on the HELOC.
As for the business line of credit I don’t have enough history yet for the business. Only a few months old. They want to see that this is working.
I will keep everyone posted.
Stanfield-while your company is still young it would be the perfect time to start establishing your company’s credit profile. I just wish someone had told me about biz credit when I opened my LLC a couple years ago…If I had started building credit for the biz back then who knows where I would be now?
I’d strongly recommend heading over to creditboards.com and spending some time on the Biz Credit forums to start learning about building biz credit (if you don’t know how to already). there’s pretty much a basic blueprint/schedule you can follow to starting get tradelines set up for your company.
I know this doesn’t directly answer your question but I figured it would be a good heads up! :beer
Thank you for the tip. Very good reading. I love how people honestly help others. Makes one believe there is still good out there!
I have another LLC that is manufacturing product and selling products that I was able to get credit on very easily. But, the LLC for the property has not been accepted for any CC or other items. Not sure if it the financial times with the banks or the fact the LLC is new.
Thanks again. Still working deals!
Yeah, like I said, just check out creditboards.com on building your biz credit for your new LLC. I could spend pages and pages writing on how to do it, but its probably easier for you just to read it yourself.
Since you say you’ve got another company you’re probably already somewhat familiar with the process of establishing a DNB # and getting tradelines established to positively report to that DNB account which will establish your Paydex score, and so on and so forth…
Bank called me today about doing a Freddie refinancing program they are just rolling out. Less credit checks, etc. In fact, they don’t verify income if you state you have same job and same income.
Then they lower to 5.75% if that is even low! All fees about 2K.
While that didn’t make sense for me because it was a 50 month pay back on the 2K plus the interest it might for some.
But, we did get to talking about the HELOC which is out because LLC deeded.
Only option seems is the Commerical loan side. So I need to follow up with a banker.
Well, off to my first REI club meeting.