Hard $ vs. line of credit

[Stefanie Willie-Bonglo]

Hello all, my husband and I are planning to buy our first flip in 2016. We are new to bigger pockets and are loving all of the amazing advice and community tips! 

I've previously been in the mortgage industry and have experience rehabbing homes with my Dad. 

Hubby and I  bought a 2 family last year and rehabbed it, we are hoping to sell it next year for a profit (60-80K) and use that capital to start flipping homes and eventually do this full time. 

I'm knowledgable about hard money loans, but I'm trying to gain more insight on the possibility of a REal estate line of credit. From what I've read, you need an LLC, 700+ fico, open credit cards etc. Then supposedly they give you 50-200K that you can draw on when needed. No interest for 6 months? This seems like a flippers dream and almost too good to be true. I plan to start calling around to some of these companies soon, but wanted to check with you all first and ask about experiences and thoughts? I'm sure there are fees associated but can't figure out what they are.

Thanks in advance for any advice.

Stefanie 

[Carrie Giordano]

@Stefanie Willie-Bonglo . You said real estate line of credit but I am assuming you mean a Heloc? If that is not correct just disregard what I'm about to say. I can only share my experience with you with Wells Fargo and have been very happy. I have a Heloc in which they offer me a line up to 75% of the equity on my property. I pay a $75 a year fee which gets waved every time I take a draw and lock in a rate. 

What I have found to be key is that I must call within 5 days to lock in my rate on any draw or it will be stuck at a variable rate. Currently that rate is about 5% but can go up to 18%. I just took a draw a few weeks ago so the rates I am mentioning were current then the options were 1 year at 1.99%,  3 years at 3.49% or 5 years at 3.99%, these could be amortized or non amortized. There is no option of no payments for 6 months but if you take the one year at 1.99 that's pretty great.