Thoughts and opinions of investing with $ from a line of credit?

5 Replies

I have my credit union filling up my mailbox and blowing up my phone at least once a week wanting to give me a line of credit.

I could take their money and and use it for investing.   Go big, you don't want to go broke over a duplex, right?

Use their money to secure and asset and refi after rehab.

What say you?

@Donald Hendricks Donald, I think tapping into a home equity line of credit is great way to get inexpensive capital to invest.  Plus the interest you pay on it could be tax deductible.  Check with a CPA.   Just be careful if you plan on buying a property below market value, rehabbing it, and then turn around to refi it.  Some banks requires 12 months seasoning before they will allow you to use new appraised value.  I would check with the bank you plan on refinancing with before you implement this strategy so there are no surprises.  Best of luck to you!


Short answer....yes.

Then, you re-use that LOC on the next deal, which you also refi, and re-use...

The most difficult part is to find a lender who will refinance within 3 months. Otherwise you have to sit on the sideline.

As long as your terms are favorable. You could also consider approaching the same lender that wants to give you this LOC with your deal and ask if they will take part in your refinance. Just the same, shop around so the decision you make is informed.

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