Next Level Financing

[Patrick Hancock]

Good morning, 

Brief history of where we are at the moment is my partner and I launched our investment firm back in 2021. Acquired six properties using our own capital. Once we had the six properties that were generating cashflow we now had a viable business. As we wanted to continue to scale we approached a bank and they provided us a line of credit in an amount that was satisfactory for us. However, the terms were there was a six month deadline from the time we closed on a property to when we had to move the property of the line of credit (which was an adjustable rate line) to a fixed line with a 25 year amortization. And we had to come up with the 25% down as it was a 75-25 LTV. Of course this is when rates began to skyrocket and even though we were cashflow positive having to come up 25% down for multiple properties would have more than likely drained the account. We then started to sell a couple of properties that we purchased late 2021 and had seen appreciation so we did make money there. The combination of the six month limit to before having to move to a fixed line (adjustable rate line is 8.5% and the fixed would be around 7.2%) plus the 25% down has been tough. Is this the typical structure of lines of credit? Any suggestions? Should I look into portfolio loans?

Thanks in advance, 

Pat