Would you access $50,000-$100,000 ULOC for Real Estate Investing?

[Jason Shackleton]

Hey Everyone!

What are your thoughts on accessing a Unsecured Line Of credit for real estate investing? Personally I invest and for the last 6 year or so I have always had access to around 30k of these lines. I never ended up using them but at times when I was renovating and things were tight it was nice to know that they were there. I knew that If I was approved before I needed to use them I would always be able to. However if I didn't have access to a ULOC I wouldn't be able to get approved for one exactly when I needed it. As investors we are always thinking ahead. Why not protect your downside?

I hear of some investors not being able to pay 2-3k for closing costs. I hear others that run into a few extra months of vacancy and end up missing mortgage payments. Basements flood and investors don't have the renovation dollars needed to get the property rented again. I honestly do not know why one wouldn't simply have a back up plan of a ULOC ready in place for when things get tough.

I have also heard stories of people being very close to being able to close on a deal themselves but they can't quite get it done. They may be short 5-10k. They end up doing a joint venture and giving up 50% of their entire lifetime profits.

I am not saying a ULOC is the answer to all of your investing problems as I believe as with any financial product they need to be used wisely. In the wrong hands used at the wrong time they could do more harm than good.

I am curious what other investors' experiences have been with using these lines. I know they are very common amongst real estate investors.

Thanks!