Investor · La Grange, IL · Member since 2015 · 64 posts · 10 votes
I am wondering what options investors are using to fund cheaper deals (<40K).
I can make cash offers, but I need a way to pull my money back out so I can repeat the process. I know I can get a LOC on them which I like due to the low fees. The problem is, I am limited on how many LOC I can get so this strategy will not work very long.
Some of the properties are already tenanted if that makes any difference (season requirements).
I think I read somewhere that some folks are bundling several of these smaller deals together to get a business LOC. Then they just add new properties to the LOC as they acquire them to increase the limit.
Long story short, I am trying to keep access to my capital while not using up my LOC and conventional loans (limited to 4) on cheap properties. Also wondering, if a bank keeps a loan in-house, does it count towards my 10 loan limit?
@Shanequa J. Thanks for the reply and the info about all loans counting towards your limit. I need to call around and find some banks that have this type of product. Do you happen to know what banks call this type of product? Would it be a commercial loan product?
David,
Stick to small local banks and talk to someone in there commercial loan department. Since you are dealing commercial many small banks will keep the loans in house, removing many limitations including this 10 loan limit everyone keeps talking about.
Also, although some banks won't touch a 40k loan they will however let you do a blanket. Use your personal loc to buy 2,3,or 4 properties for cash then go get 1 blanket on all of them and take your money back. Rinse and repeat.