Poke holes in my plan...

[Taft Love]

Hi all,

Happy New Years!

I have a plan for financing properties and want to run it by all of you. Since I'm still learning my way around funding deals, I'd love to hear if I've missed anything. Are there any details that would make this impossible?

While I welcome opinions on whether or not I'm going about this the "right" way, what I'm hoping to learn is whether it's possible and if there are any rules of which I'm not aware that might sneak up on me and ruin my ability to fund deals.

- I'm buying SFR that will cost around $100k all-in. Planning to BRRRR, taking my cash back out. However, my market is tight and I'm willing to leave $5k in each deal.

- I've saved up around $60k in cash. This is enough to start a couple of deals, but I'll run out of cash pretty quickly.

- In order to make sure that doesn't happen, I've worked out a deal to get access to a low-interested $100k (~7%) line of credit from a former business partner who wants to put his money to work.

- My plan is to start by using my own cash to get into deals. I'll put 20% down on each deal, leveraging hard money. A deal "pencils" if I can spend less than 80% of ARV while factoring in hard money rates.

- Every bank I've talked to has 6-month seasoning requirements for cash-out refinances—even for in-house loans. This means I can do 3 at a time using my own money. By the time the first 3 are done, I should be able to save up an amount equal to what I left in each deal. So I should be able to do 3 at a time forever. That means ~6 per year.

- If I decide to do more than 3 at a time, I'll need more cash. If that happens, I'll tap into the LOC. I'm planning to use the LOC for down payments and pay interest out of pocket.

So, what have I not thought of? Please let me know why this won't work.