ED- would I be a good candidate for a Working Line of Credit???

Ed,

Over the past 2-3 years I’ve been slowly growing as a traditional passive investor, even though my initial motivation was to become a creative investor. When I first tried my hand at the creative side, I always came close to closing deals but was never able to. The first deal I WAS able to do was a semi-creative duplex to condo conversion, where we successfully sold the first condo, and have been living in the other condo for 4-5 years now. I’ve since cashed the 11k check received at closing and tapped out the 30k equity with a HELOC, which was all used to finance a fsbo duplex for another condo conversion.

A hard knocks lesson in market cycles pretty much tied up all my profit from the first deal in that 2nd duplex which is currently being rented and held for a tiny positive cash flow.

Then I purchased my first fsbo single family (flipped to me by another investor) for 50 cents on the dollar and have held onto it as a rental. This got my foot in the door at a small local bank, where they currently offer 80% ltv, 10% dp, and 10% free equity based on appraisal. Rental income must be 1.25 times the underlying payment (PITI I think). These are 2-3 yr balloons, where the rate gets adjusted if not re-fied, and is amortized over 30 yrs (99% sure they’re portfolio loans).

That loan program has allowed me to take on 2 more duplexes and a 4-plex to make a relatively small rental income stream (realistically about 1k/mo), but has left me cash-poor.

Based on your experience, do you think a wannabe like me could benefit from a working line of credit, and do you think it would be possible for someone like me to get a line using my current buy and hold strategy as a business model?

Please let me know what you think.

Thanks,
Rommel

PS
I’ve always tried to buy with some kind of upside potential, on top of the positive cashflow bank requirements. For example- a SFH ~50 cents on the dollar or a duplex with 60-80k condo conversion potential. So while cashflow is one of the ultimate goals, it’s only part of the equation. I’d really like to scoop up as many deals as I can now while the market’s down, to generate lots of cash when the market turns back around, then buy more/better cf properties. At which point I’d hopefully have more time and confidence to try investing creatively and without money (and could sleep soundly knowing I actually have the money if I needed it.)