Young Newbie with a question about Lines of Credit.

6 Replies

Hello, I am 19 and just started learning about real estate investing. I'm posting this hoping some experienced investors can give me input on lines of credit. Within the next 2 months I will be starting to work as an apprentice after my first month of working I plan to open 3 lines of credit. The first line for usage of Propertie loans, the second for rehab cost, and the third line for my everyday/weekly/monthly needs (non real estate related). I plan to build credit on all three credit lines over the next 2 years untill I qualify for a conventional loan. Could I please get some opinions, is this a good idea or bad idea? 

Also i would be grateful if someone could link me to a book on this topic.

Bad idea... First, what, specifically are you trying to do with this credit? Are you purchasing property? Second, do you have enough income to be able to pay these lines back? Do you have enough/any credit history to qualify for three, possibly, large lines of credit? My advice is to start small, build credit, get a full time job, save money. Real estate investing takes money, sometimes a considerable amount.
(267) 520-0454

What collateral are you going to use to get the Line of Credit? I recommend you speak with a Credit Counselor. I have spent the day chatting with LOC offers and they are going to want 680-685 credit and equity in a property to provide a line of credit. You might be better off with a credit card buying and paying off to build a history, but you would do well to ask a credit counselor for advice.

Thanks for the response. I plan on doing multiple flips while working full time as an apprentice. Than gradually move into buy and hold investments. As for my income my pay starts at $20 an hour and my pay rate goes up every 6 months and caps at $45.50 an hour. I don't plan on actually taking on loan out on a property until 2 years from now. I'm just trying to learn as much as I can now so I'm not kicking myself 2 years from now for not gaining knowledge on this part of investing. Anyway I have 0 credit history i was assuming you could open 3 lines as long as you have steady income. What exactly would you recommend? 

Originally posted by @Jack Bobeck :

What collateral are you going to use to get the Line of Credit? I recommend you speak with a Credit Counselor. I have spent the day chatting with LOC offers and they are going to want 680-685 credit and equity in a property to provide a line of credit. You might be better off with a credit card buying and paying off to build a history, but you would do well to ask a credit counselor for advice.

 That's a great idea I'm going to have to sit down and go over it with a counselor. Thanks for the idea.

@Thomas Ryan you can possibly open small lines of credit or credit cards with no credit history. I picture what you are describing as $100k in unsecured debt, which will be nearly impossible. You could loon into hard money lenders for flips, but will probably need 10's of thousands of dollars. I suggest you learn ad much as you can, save for a while, and then jump in when you are financially able
(267) 520-0454
Originally posted by @Jason DiClemente :
@Thomas Ryan you can possibly open small lines of credit or credit cards with no credit history. I picture what you are describing as $100k in unsecured debt, which will be nearly impossible. You could loon into hard money lenders for flips, but will probably need 10's of thousands of dollars. I suggest you learn ad much as you can, save for a while, and then jump in when you are financially able

Thank you for the input I'm going to look into hard money lenders more. I did read about that type of lender recently, but just a few details on it. Within the next 2 years I will have at least 80-100k saved which I think should be more than enough for the type of property I'm looking to start with.

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