$200K in account (use that cash or get line of credit on it)??

[Matt N.]

Hi all, I have $200k in my LLC account. I plan to use this to purchase distressed property, rehab, rent out, refinance and then replenish the account.

I am wondering if there is any benefit on getting a commercial line of credit SECURED by the $200k account? My commercial lender said that wouldn't be a problem; however, I am only looking at properties under $155k right now for the next 6 months or so. Does anyone have any advice on how best to leverage this $200k, or should I just write out checks from my LLC when I purchase that $120k property and then replenish it? Failing to see the benefit of getting the commercial line of credit in my situation.

Cheers!

[Rashad Nelson]

Hey Matt, 

Great question. Just my two cents - I would write checks directly from the LLC. Having no middle man to deal with places you in a superior advantage when procuring deals from wholesalers, owners, etc.

I'm currently buying properties with my IRA, but there's a limit to how many times I can do it within a year without incurring the wrath of Uncle Sam, and my IRA custodian is my middle man. I hope to be in your position fairly soon. I hope this helps.