Posted by Trini on January 28, 2002 at 23:08:57:
This question goes ditto for me EXCEPT for the good credit part. Currently, I am paying down debt and making payments on time. No banker is happy to see me these days though… I have a sewing business and would like to refi my home, to buy a small building for my classes with 2 apartments on top as rentals.
Equity Line of Credit for Investments Purposes? - Posted by E. Rodriguez
Posted by E. Rodriguez on January 28, 2002 at 18:40:18:
I am new at REI and I am taking time to get educated. I own a home with good equity on it and I was wondering if it would make sense to open a Home Equity Line Of Credit so I have money available for investments.
I have good credit, but my purpose is to be able to grasp an opportunity when I find one but probably for down payment only, or foreclosures.
Does it make sense to do this?
By the way, ny banks says that because of my good fico, they would give me the line of credit with no points, and only prime, no margin!
Should I do it?
Does it make sense?
Thanks in advance!
Yes, I’ve done that!! - Posted by Tim (CT)
Posted by Tim (CT) on January 29, 2002 at 16:02:32:
That’s exactly what I’ve done. My credit score is about 720 and I got a HELOC (Home Equity Line Of Credit) with no points ($35 annual fee) and prime plus 1 interest rate. I was able to pull out about $40K and use for investment purposes. It has worked out pretty well so far. I’m into it for about 25k right now because of my deals so I want to try and build it back up with my positive cash flow from the current properties I have. This won’t stop my from looking at deals though. You never know. You might be able to pick up a property via a L/O with no option consideration and then turn around and L/O to a T/B (sandwich L/O). This would be a no money down deal but you wouldn’t take title to the property (but, who cares if you can collect 10 to 15k on the backend, right!!)
Good luck.