Anyone using a guidance line of credit?

[Preston Quinn]

Anyone using a guidance line of credit for their acquisitions?

I went to my bank yesterday to hash out the details of my most recent brrrr deal, (which went great) and my banker suggested a guidance line of credit when I ask what options they had to allow me to move faster in my acquisitions.

Up til this point, I have been using commercial financing, that involves 20% down to purchase the property, then I am using a HELOC and a BLOC to do my rehabs. Then refinancing out and paying off the heloc the bloc and the existing mortgage. Which I'm ok with as long as I can continue to find off market deals. But recently, there have been some decent deals come across the MLS that I would've like to at least offered all cash on with a quick closing.

We didn’t have a lot of time to discuss to guidance line of credit. But she is suppose to get back to me in a few days. Anyone with experience on this type of line of credit I would like to hear your opinion of it.

Thanks

[Doug Smith]

@Preston Quinn I was a banker for 25 years and I did many guidance lines for several purposes. A guidance line is a commercial line of credit that’s often given to developers as they develop property. The bank is approving up to a certain amount under certain criteria for you to go out and purchase property, of course with their approval. Most of the draws will be termed out with installment payments. The problem is that most banks are not fond of doing guidance lines, or doing financing in any other manner, for smaller real estate investors. It would be certainly worth exploring if they’re willing to do that for you. Most branch bankers don’t have experience in commercial lending, so they probably will not know their banks policy. Make sure you’re dealing with someone that actually directly does guidance lines and works with real estate investors. I wish you luck.