Bank line of credit ??

[Jesse Barahona]

I am getting ready to purchase my first property, If I picked out a property that would need some work done, Would applying for a bank line of credit be helpful? If I don't have that type of cash on hand. Or should I look towards Hard money lenders ? What would be the pros and cons of these strategies ? What were some things you guys have ran into with using these two types of funding ? Any tips and info will be greatly appreciated ! 

[Terry Lao]

@Jesse Barahona

If you own a home that you live in, then you should apply for a HELOC ( Home Equity Line of Credit). Bank will give you 70-75% value of home minus outstanding loans. The interest rate is usually prime plus zero to .5. I have 200k heloc at 5.125%.

LOC interest rate is 8-9% with fico above 760. Hard money lender interest rate 10-15% depending on fico and HML.

You can debate the interest if deductible or not.

Terry