Posted by JimG (OH) on February 23, 2001 at 14:18:20:
Ed-
You said in your response that you have to develop a track record. In your opinion, how long and/or how many deals does that normally take. Also, if a new REI cannot obtain a working line of credit, what should he look to get instead?
finding money - Posted by SC
Posted by SC on February 22, 2001 at 20:00:23:
hello
I am beginning to do a little real estate investing and I have a coach helping me to get familiar with the market. I am looking to purchase my first unit and I planed to either do a refi and pull money out of my current home or get a home equity line of credit to pay for closing on the unit. what are the benifits of the line of credit? My coach advised me to go that route.
Re: finding money - Posted by Ed Garcia
Posted by Ed Garcia on February 23, 2001 at 10:00:26:
SC,
When used right, a credit line is just like having CASH. SC there are different types of credit lines. When you become an experienced investor, your ultimate goal should be a Working credit line.
A Working Credit Line is AWSOME.
There are just so many advantages to having a working credit line.
(1) You can make CASH offers, allowing you more profit in your deal.
(2) You can CLOSE faster, making that extra deal, and more profit.
(3) You can SEASON your properties, by leaving them on your line for a while.
(4) You can use it to do FLIPS, where conventional financing is too expensive.
(5) It’s CHEAPER money, meaning you pay 1 or 2 over prime and no points
per transaction.
(6) You can make offers with more confidence, which is projected to the seller,
or Real-estate agent.
And the list goes on. First to obtain a working credit line, you must have a TRACK RECORD…
This would not be a financial tool for a Newbie, the Banks would not want a Newbie,
because of the lack of a track record.
As a rule, a Business Plan is required. I usually recommend soliciting a small local Bank. The reason being, you can easily establish and build a relationship with a small Bank,
rather than just taking a number at a larger National Bank.
SC, I teach people how to get a working credit line, and I can assure you that once you have one. You won’t know how you did business with out it. There’s not a whole lot of information I can give you in just one post other than to tell you that, yes, knowing how to utilize your borrowing power, is necessary in order for you to grow in this business.
Good luck,
Ed Garcia