Real Estate Agent · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes
For those with an LLC and free and clear properties what is the better short term loans to use for flips. The hot buzz word seems to be portfolio lenders but is seems to be a clunky process with a heavy pre-payment penalties The secured business line of credit seems to work like a consumer HELOC and to me would seem to be a better way to acquire funds.Flipping properties with short term loans of a year or less should be less expensive then portfolio or hard money loans
What are the pros or cons or these methods or what other types of short term loans would be good for flips ?
I don't have the answer @Account Closed but it just seems logical that if you could secure a high credit limit with business credit line that worked like a HELOC.
That would have to be cheaper initial cost and lower interest rates than any portfolio/HML, right? Not to mention once it was set up you could just keep using it flip after flip.
If you're doing flips, then to me the best option has to be a line of credit.
If you do a portfolio loan, you're taking out a loan. You're going to pay interest on that money whether you're using it or not.
There are some banks that will do HELOCs on investment properties provided they're in first position. Terms are actually pretty good too. Cheapest money you'll ever get.
Thats what I would do. Not sure what terms/rates are for secured business lines of credit exactly.