Can anyone please suggest the best bank or source to look towards for a line of credit? I do not have a business entity set up yet but am planning on setting up an LLC soon.
I primarily need this for rehab costs as I don’t want to totally deplete all of my savings to do this.
My credit is 750+ on all 3 bureaus and my debt to income isn’t very high but will be at 50% once my most recent property hits my credit. I closed on this property last Thursday so not sure how long it takes for them to report.
It might be tough to acquire a business line of credit without a business entity. As a sole proprietor, you will probably be asked for your schedule C. Once in the advantage of the “no financial” small business line of credit falls away. In addition, many real estate investors will file their real estate on Schedule E and may not have a Schedule C to provide. It will go much smoother when a business entity is in place. I would wait six months for the entity to season and then try to attack the SBA backed small business lines.
It sounds as if you would be more inclined to acquired a personal line of credit. I would first start with the bank that holds your operating accounts. If that does not work I would ask some of the other local banks or try national companies like Amex or Capital One.
It sounds like you have several properties. Maybe a line of credit would be available to you through one or more of your properties. Also with your credit there are unique conforming lenders who have products that will go up to 95% on investment property for purchase price, cost of rehab, and closing costs. With excellent terms and no prepayment penalties.I am very familiar with these products and they have been excellent for the investors I work with who have similar situations to you.
Guys I appreciate the comments. But I don’t think that it is in my best interests to refi already and pay atleaste 2k to get it done just doesn’t make sense to me.
I think that I have narrowed it down to getting a new American Express Blue card or going to Wells Fargo and getting a personal line of credit. I have my checking account and a 1st mortgage throught them as well. Any thoughts?
Always start by trying to work with lenders and banks that know you and that know you. When looking at American Express, they too have small unsecured business lines up to $50K that might be available to you. If not now, they might be able to step in and help again in the future when, and if, you out grow the Blue Account.
I think in both cases, Wells Fargo and AMEX, you are setting yourself up with lending partners that have the ability to expand their support as your grow. Plus, by acquiring unsecured lines, you are not disturbing your asset base while you are creating renewable capital. It is important to realize that credit lines are best used on short term and/or recurring costs. I think you they would be a great tool for rehab costs.