Best way to borrow to buy investment homes without getting scammed

4 Replies

'Is a line of credit the best way to go for a beginner with no history in flipping homes? I spoke o a lender and that was the suggestion

Scott

If you have good credit 720+ you can get a business line of credit through your LLC.

Paul

What amount would be available with a business line it credit? What's a typical interest rate?

@Scott Lunn a business line of credit may be a good thing if you use it wisely. Form a neighborhood institution, you are looking at approx 50k to start and can build up from there. Depending on your credit and some other factors, and if you have a business or not.

Some people or institutions will help you get a larger amount. Some of these people/places may charge a percentage or a fee for the amount of funds they get you. There are also fee based DIY programs to teach you how to maximize credit lines. Be wary of a deal where you are charged to get a line of credit, some scams are out there.

Consider people you know who have a Roth IRA, where they can self direct their funds into Real Estate Investments. Any cash down fall I have had for deals, I have used Roths to fund my deals, and it has worked out exceptionally. In addition there is "love money" (it's not what you think LOL, love money meaning, people who love you and will lend to you, usually friends and family)

Hard or Private money is a great way to go. I fund virtually all my deals with a combo of all of the above.

@Rob Pasche I have noticed in my area, typical interest rate at approx 5-8% on a business line of credit. You only pay interest on what you use.

Best of luck

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