Building a business line of credit for BRRRR

[Samuel Bavido]

I recently listened to one of the BP Podcasts in which the guest talked about using a business line of credit to BRRRR properties. I'm really interested in doing this. I'd like to hear your thoughts on how to go about putting myself in position to do this. I don't have to do it tomorrow; if it takes me a couple years to build up to that point, it's ok; I'm not in a huge rush. Below is my financial situation. What steps should I take put myself in a position the banks would like?

I have a SFR that is cashflowing about $200/month. It's worth roughly 95k, and I have 35k of equity in it. For the past two years (since I bought it) I have been putting any cashflow into the mortgage, hoping to get it paid off within the next couple years. I do not have this property in an LLC; it's currently the only thing of value my wife and I own, so it didn't seem worthwhile. My wife and I both have excellent credit (730+). We currently rent, but will be purchasing a home later this year for 100k with 10k down. That property will eventually be a rental as well. Moving to that new house will also mean leaving my wife's job and my job. I have a solid set of marketable skills, and feel confident I can bring in 40k/annually; I might be able to bring in as much as 60k. 50k seems a reasonable expectation for me. I hope to be in a permanent job by August or September. 

What would you do if you were me?