I’m a non-to frequent poster around here but i have a few questions to ask you guys. I’m on the lending side of the business and not the investment/purchase side.
Recently to expand my product base I signed up with two companies who “secure” unsecured lines of credit with banks. Basically they’re just a go-between between the borrower and the bank and at it’s essence they aren’t needed. However, i’m still new to the unsecured credit line business so i’ll be working with them for a few deals until i get the hang of things and then i’ll make my own direct contacts, but that’s all besides to the point.
*My questions are these
Have any of you all used unsecured tradelines in lieu of hardmoney to purchase properties?
*Are the tradelines as easy to acquire as they purport them to be?
One company i work with does personal lines which requires a fico of at least 640 but preferrably 680 and promise that you can potentially get up to 100K unsecured in a few weeks. (using multiple lines)
The other deals strictly with business lines of credit and promises up to 1 mill provided you meet their criteria.
I’d like think to borrowers with decent credit these lines would be a great alternative… The funds aren’t really allocated to any particular purchase and you don’t have to meet a lender’s guidelines in order to close on a property in theory.
But again, i’m kind of new to this particular lending niche so i’d like some feedback from those who’ve used them, tried to use them or whatever. Give me the good, bad and ugly.
Think about it . Many people already have lines of credit. One source is the common credit card, they even give you checks you can use. Another source are helocks, those to often come with checks. Call up any bank and ask them for unsecured lines of credit. Some banks don’t do this but many do. Just tell them you want to borrow money and see what they have to offer. I have some unsecured lines with banks. I found it better to call myself a business and be a corporation. For some reason they are much more interested in a business/corporation than just a person. The important thing is to just start borrowing money and then pay it back BEFORE you are supposed to and people will want to lend you more and more of it.
Your entering into the theory “Throw it against the wall and see whats sticks” This is what the banks were doing till they collasped in Feb. Unsecured lines can be dangerous. However for the borrower they are great as long as they do not want to run off with your money, Since it is unsecured, you can not make a claim on what they buy with the money. And guess what, take them to court, if they do not pay, Oh well…its a money judgement, you will get some back maybe one day if the mortgage company refuses to loan them money because of the judgement and the person didnt get it removed with a credit repair company that got around you and had it removed.
Also I have noticed, the unsecure lines have lower interest rates. HML have high rates and points for a reason. It is to make money fast. Why not become a HML…secure it with real estate… You collect 3-5 points on front end, and charge 12-18% interest with a 6% min if paid off before 6 months.