Personal & Business LOC

[Web A.]

Hey BP.

I’m in the Northern New Jersey area trying to find the best ways to fund deals through either personal or business lines of credit. Has anyone had luck finding a company or institution that provides these funding tools with great terms?

[Seth Williams]

Hi @Web A. - I have a few questions and Ill leave my thoughts. Are you looking to use the LOC to finance the down payment portion, or the whole amount of the purchase? What defines Great Terms?

Personal lines of credit are often un-secured, and therefore by definition, really BAD terms lol. The interest is fixed or variable and high. Often these personal lines of credit are also underwritten to make sure you, in the terms - loan depending , cannot use them to buy real estate. For instance, SoFi, its a great personal loan company that will often write a line of credit, income and credit depending, personally for up to 100k. That being said, you need to sign something saying that you cant use it to buy real estate. 

For business lines of credit, you have to obviously have a business, typically be in business for 1-2 years minimum, and show substantial revenue in order to qualify to be lend $ - especially on this cash basis line of credit. That has less restrictions, but depending on who you are using to finance the rest of the property if you are only speaking about the down payment, might take objection to you essentially 100% financing something with the LOC and a mortgage. Hopefully this helps...

What I would tell you is google around where you live in NJ and find a small local credit union as they are a little more flexible with terms. You may find a portfolio lender that wont sell its loans, so might be more liberal in its underwriting terms. Make sense? Good luck!