1st Meeting With Banker

[Patrick Howell]

Hello All,

I'm about to have my first formal sit down with my local banker.... I would like to get some feedback on my "planned request".

I currently have one rental property that is debt free that rents for $500.00 a month. (Purchased at foreclosure for 27k, with 10k repairs) The property appraised for 67k at the time of purchase. I would like to utilize the 100% equity in this home to create a line of credit that I can use to purchase that "next deal." Here is my plan: use line of credit from property #1 to buy property #2. Use 100% of cash flow from property #1 to pay on credit line....

Is this a reasonable approach? Any thoughts or concerns? In theory, once each property established reliabe cash flow, couldn't you use this method in succession to move from one property to the next? My goal is to strictly buy and hold rental properties long term and I do not depend on the property's cash flow for income. I have an LLC that's been established for about a year with good personal credit. Any feedback would be greatly appreciated....