Stated Business Line Of Credit For Real Estate
Hey, I am a newbie and have been doing some research in RE and decided to establish an LLC for rental properties and an S-Corp for my wholesale and flipping deals.
I plan on applying for a stated business lines of credit from banks or financial institutions to use in my real estate business.
That said I have three questions;
HOW CAN ONE APPLY FOR SUCH STATED BUSINESS LINES OF CREDIT?
WHAT IS THE PROCESS INVOLVED?
HOW LONG AFTER STARTING A COMPANY CAN ONE APPLY FOR A STATED BUSINESS LINE OF CREDIT?
thanks in advance for your answers
I would love to tell you how simple and easy it is to get lenders to open business lines of credit...but it just aint so.
The business lines of credit I am using were granted based on 50% loan to value of commercial real estate AND a personal guarantee.
There are ways to minimize your cash outlays when buying investment properties....seller finance, subject to, etc., without depending on a bank for financing your deals. Invest your time researching these methods.
The lenders want collateral. "You lose everything before I lose anything" is how a banker described the system to me.
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JS....How about 31 years operating a growing, profitable retail business, owning all the (paid for) retail locations, a 700+ credit score, etc.
You STILL NEED collateral (50% LTV in my case), and a personal guarantee. Not exactly easy money, huh?
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Jane Sherman and Gordo are right. There are definitely unsecured lines of credit out there.
Thank you very much for your information, but I want to know if I can get one in my situation.
I am going to register an LLC in a few weeks with a decent credit score, so what should I do from here on to secure a business line of credit for a new business without having to wait for 2 years to establish the business history. I know for a fact that there is a way.
Thank you all for your much needed reply. In my search I came across this company that has partnered with the IRS and are help helping start ups get credit within six months as long as you follow their procedure. I have not used them yet but I will, I just need to get my company registered first.
http://www.corporatecredit.biz/index.php
check them out and come back in time to post your experience. I will when I make use of them
I thank everyone for their response, I hope people have been able to get as much needed info from this forum. If any one knows other consultants that help with securing business credit, please post their website on this forum
Walk away from the deal your in now if the other one is really that much better. Also maybe you could negotiate to get some $$ back.
I agree. Go with the 2nd property. If the first will not refund the advance then use the remainder of the 6 months to get the other property into shape.
If the owner of the second property will hold a note then you can make the mortgage payments to her for the next year or so until your credit is better established. And refinance the property at that time.
But in terms of numbers, the second is just a better deal as long as there are no hidden repairs surprises.
$25K for a home appraised at $60K versus $60K for a home appraised at $64K - fairly straightforward.