Any recommendations on LOC options for purchasing rental property?
How do you plan to collateralize the LOC, @Bethany Brookfield ?
@Jaysen Medhurst Ideally the asset being purchased. But curious to learn about different options available!
i buy with a loc on each house. Bank does an arv appraisal and loans me 80% on a 6 month interest only. I buy and rehab until I hit the mark. If I over run then I'm in my pocket. After rehab, bank verfies I did the rehab as projected and covert to conventional mortgage. It's a sweet deal. Portfolio lender. Good luck.
@Clint Shelley , so you’re putting down 20% and the rehab is out of pocket? Sweet if you can avoid two sets of closing costs.
Hi @Clint Shelley -
Thanks for the info! I assume you're typically purchasing around 70-80% ARV? So essentially the LOC covers 100% of the purchase, and then you'll use your funds for holding costs and repairs? Sounds great that you use the same lender for both the LOC and loan. Mind sharing their contact info?
I use Ameris bank in Dothan, Al. I'm buying and funding repairs with the loc until I nax out at 80%. Then I get into my money. Once the house is ready, I get a final appraisal and bank converts loc to 20 year mortgage. Pre covid. I have a land deal I'm selling, so I'm going to work that for a while and see what happens. Good luck.