Buying & Selling Real Estate Discussion

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Kevin Hurricane Hudson
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Using a credit line and paying it back

Kevin Hurricane Hudson
Posted Nov 8 2022, 11:39

I'm in the process of acquiring a credit line on a property. I'll have a $200K credit line soon. I know I could do a BRRR with a property under $200K but what if the property is over the $200K mark. How best do I use this credit in purchasing a property for let's say $400K? My credit line has to be paid back within 12 to 18 months. Thanks for your help!

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Replied Nov 9 2022, 04:46

@Kevin Hurricane Hudson

let's back up from the financing for a second.

will this be your first BRRRR?

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Kevin Hurricane Hudson
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Kevin Hurricane Hudson
Replied Nov 9 2022, 08:57
Quote from @Nicholas L.:

@Kevin Hurricane Hudson

let's back up from the financing for a second.

will this be your first BRRRR?


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Caleb Brown
  • Real Estate Agent
  • Blue Springs
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Caleb Brown
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Replied Nov 9 2022, 09:06

I would first do a BRRR sub 200K to get your feet wet. If you do have extensive experience then you could use the credit as a DP possibly. Not sure if you can utilize a hard money/private money lender

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Kevin Hurricane Hudson
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Kevin Hurricane Hudson
Replied Nov 9 2022, 09:35

Thanks for your input.  I think you're right...I'll be on the lookout for a sub $200K brrr.  Thanks again 

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Kevin Hurricane Hudson
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Kevin Hurricane Hudson
Replied Nov 9 2022, 09:41
Quote from @Kevin Hurricane Hudson:
Quote from @Nicholas L.:

@Kevin Hurricane Hudson

let's back up from the financing for a second.

will this be your first BRRRR?


yes sir. First BRRR

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Replied Nov 9 2022, 15:01

@Kevin Hurricane Hudson

OK. BRRRR is tough, and BRRRR is expensive. And BRRRR is extra tough right now. You have to find a great deal - usually off market - and be able to add significant value via the rehab. And you have to factor in all of the costs that get ignored on BP - closing costs, holding costs, refi costs. And then when you refi your interest rate is going to be high, making it tough to cash flow.

I'd start small and wait until you find something that works.

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Kevin Hurricane Hudson
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Kevin Hurricane Hudson
Replied Nov 9 2022, 17:40

Thank you for your input. I really appreciate it.👍🏻

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Sebastian Marroquin
  • Real Estate Agent
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Sebastian Marroquin
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Replied Nov 9 2022, 17:49
Quote from @Kevin Hurricane Hudson:

Thanks for your input.  I think you're right...I'll be on the lookout for a sub $200K brrr.  Thanks again 


 Even if you do: look to see if you can qualify for a loan for $150k , $200k , 300k or $400k with 25% down. 

Use the 25% with the credit line and the rest will come from the lender. 

Make sure the rents cover : the credit line payment + the mortgage payment + costs + cash flow 

Or do all of that for a fixer : use the rest of the funds to renovate and holding costs then refinance with conventional loan or DSCR loan and rent it out.

REPEAT 

Let me know if you need a good lender in the state/ city you want to do business in! 

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Kevin Hurricane Hudson
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Kevin Hurricane Hudson
Replied Nov 9 2022, 18:06

Got it.  So you wouldn’t recommend using the credit line to pay in full for the property and repairs then re-fi? 

you would use the credit line only for 25% down and repair cost?

Then refinance after some time to repay the credit line, correct?


thanks again for your help.