Line of credit to start investing

Member since 2019 · 26 posts · 32 votes

I am looking for ways to get started while I continue to save capital. Is it possible to get a line of credit through an LLC if I am just starting out? My idea is that I would use the line of credit to flip properties to help build more capital quicker to invest in multifamily rental properties. Also instead of just flipping, would it be possible to use for a BRRRR type of strategy to keep the property as a rental and refinance to pay back what was borrowed from the line of credit?

Appreciate any insight.

0 Reply

35 views

Most Popular Reply

Brie SchmidtBusiness Member

Moderator

Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes

Originally posted by @Adam Bush:

Appreciate any insight.

You can talk with a commercial lender, it would depend on the value of the assets in the LLC. If the LLC has no assets yet you can get a unsecured personal loan, but rates are terms are pretty high

Podcast Guest on Show #132

Second City Real Estate4.821 Reviews

Website View Page

1 Reply

See this reply in the discussion

4 Replies

Jump to latestLatest

Sort by

Brie SchmidtBusiness Member
Moderator
Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
7y
Originally posted by @Adam Bush:

I am looking for ways to get started while I continue to save capital. Is it possible to get a line of credit through an LLC if I am just starting out? My idea is that I would use the line of credit to flip properties to help build more capital quicker to invest in multifamily rental properties. Also instead of just flipping, would it be possible to use for a BRRRR type of strategy to keep the property as a rental and refinance to pay back what was borrowed from the line of credit?

Appreciate any insight.

You can talk with a commercial lender, it would depend on the value of the assets in the LLC. If the LLC has no assets yet you can get a unsecured personal loan, but rates are terms are pretty high
Podcast Guest on Show #132
Second City Real Estate4.821 Reviews
Website View Page
1 Reply
Adam Bush
OP
Member since 2019 · 26 posts · 32 votes
7y
Originally posted by @Brie Schmidt:
Originally posted by @Adam Bush:

I am looking for ways to get started while I continue to save capital. Is it possible to get a line of credit through an LLC if I am just starting out? My idea is that I would use the line of credit to flip properties to help build more capital quicker to invest in multifamily rental properties. Also instead of just flipping, would it be possible to use for a BRRRR type of strategy to keep the property as a rental and refinance to pay back what was borrowed from the line of credit?

Appreciate any insight.

You can talk with a commercial lender, it would depend on the value of the assets in the LLC. If the LLC has no assets yet you can get a unsecured personal loan, but rates are terms are pretty high

@Brie Schmidt Thank you for your response. The LLC would not have any assets. Does that disqualify me from this process? I thought about the unsecured personal loan route as well, however it does not appeal to me as much.
0 Reply
Brie SchmidtBusiness Member
Moderator
Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
7y
Originally posted by @Adam Bush:
Originally posted by @Brie Schmidt:
Originally posted by @Adam Bush:

I am looking for ways to get started while I continue to save capital. Is it possible to get a line of credit through an LLC if I am just starting out? My idea is that I would use the line of credit to flip properties to help build more capital quicker to invest in multifamily rental properties. Also instead of just flipping, would it be possible to use for a BRRRR type of strategy to keep the property as a rental and refinance to pay back what was borrowed from the line of credit?

Appreciate any insight.

You can talk with a commercial lender, it would depend on the value of the assets in the LLC. If the LLC has no assets yet you can get a unsecured personal loan, but rates are terms are pretty high

@Brie Schmidt Thank you for your response. The LLC would not have any assets. Does that disqualify me from this process? I thought about the unsecured personal loan route as well, however it does not appeal to me as much.

The business has to have revenue and assets to loan against. Just having an LLC won't get you anywhere until it is established
Podcast Guest on Show #132
Second City Real Estate4.821 Reviews
Website View Page
1 Reply
Scott SmithPro Member
Attorney · Austin, TX · Member since 2014 · 1k+ posts · 932 votes
7y
Originally posted by @Adam Bush:

I am looking for ways to get started while I continue to save capital. Is it possible to get a line of credit through an LLC if I am just starting out? My idea is that I would use the line of credit to flip properties to help build more capital quicker to invest in multifamily rental properties. Also instead of just flipping, would it be possible to use for a BRRRR type of strategy to keep the property as a rental and refinance to pay back what was borrowed from the line of credit?

Appreciate any insight.

The best financing options you will find are in your personal name. Not only would you end up paying more interest on a commercial loan through an LLC, but it gets harder to find financing. The primary function of an LLC is to help protect you from the liability of a law suit against the property, or to protect an investment property in case you personally get sued.
Podcast Guest on Show #109
1 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.