Acquisition Line and Scaling Up

[Jeff V.]

So far we have used a portfolio based HELOC to fund our acquisitions and rehabs. This has limited us to typically 1 BRRRR deal, 1 Fix and Flip deal per year, or 1 note deal.

With this model I'm limited to the equity I already have as a limit and have to free up the line to use it again. This typically takes 6 months to a year of seasoning to refinance our capital back out based on ARV instead of purchase plus rehab cost. (BRRR Strategy)

Another issue is we generally stop our lead gen once our line is deployed because we don't have the capital to buy another deal while one is going on and that takes more lead time to get rolling again.  With alternate acquisition funds like an asset-based line based on the deal or something similar, we may be able to scale up to multiple deals simultaneously.

Looking for advice on what others have done to increase their acquisition velocity where it isn't dependant on how much equity we have in our portfolio, but based on the deal itself.

For example, if 3 deals cross my desk that are solid, I would prefer not to be reliant on whether my HELOC is tapped at the moment the deal crosses my desk. I have missed more deals from the stop and go, ebb and flow of capital availability than any other thing.

Does anyone have any advice on how you were able to overcome any of these stumbling blocks in the beginning of your investor journey?

Thanks,

Jeff V

[Brian Ellwood]

For acquisition, you need to start using private lenders to take down the deals, or structure seller finance deals where the seller is the bank.

With these two acquisition strategies, it would remove the bottleneck you have in that part of your business and allow you to scale a lot faster and keep your marketing/lead gen going at all times.