Rental Property Investor · Miami Beach, FL · Member since 2016 · 52 posts · 2 votes
Hi Everyone!
Very excited to see so many discussions about REI in Multi-family. I am a big believer that with hard work and the right mentality with good intentions, you will all find the success that you are looking for.
On to my question, I am looking at a few things right now to get my family set up with a deal here in Miami. I am not limiting myself to here, and I am open to all parts of Florida.
My qustion is in regards to Business Credit. I have an offer from a lender that is currently asking for a 12% fee and in return they will provide my business with 60k in Funding.
While this seems like a great thing to be able to use that credit to finance a DP, what are the risks I am taking on?
Also, has anyone else used this method of finanacing to get started?
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
10y
It is an absolute scam. Either 1) you will get no loan whatsoever, or 2) It is some BS combination of "trade accounts" credit.....Office Depot, Home Depot, and other misc useless businesses......Not a cash line of credit.
Once you qualify for any kind of business line of credit, there will be No upfront fee, and more importantly it will be because you have established an Actual ongoing business that shows a profit, and consistent revenues over a few years.
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
10y
It is an absolute scam. Either 1) you will get no loan whatsoever, or 2) It is some BS combination of "trade accounts" credit.....Office Depot, Home Depot, and other misc useless businesses......Not a cash line of credit.
Once you qualify for any kind of business line of credit, there will be No upfront fee, and more importantly it will be because you have established an Actual ongoing business that shows a profit, and consistent revenues over a few years.
I am coming in as a referral from a consultant who has used this type of funding to get his deals done. What kind of data can you provide to help me make this decision. I am also hesitant on this as well.
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
10y
I'm not going to even bother looking at their site.....you don't get an unsecured cash line of credit for $60k without some substantial/decent financials, and a business history.....period. And, you wouldn't be paying a 12% fee for a legit LOC. Your "consultant" is just a commissioned salesman for the scam.
Rental Property Investor · Miami Beach, FL · Member since 2016 · 52 posts · 2 votes
10y
@Wayne Brooks I wouldn't even doubt that route. I have seen worse, and even been involved unfortunate in worse from the sales perspective. That is one of the reasons I am very cautious.
So let me ask you then, what would be a better way to get involved in building financing for a deal in multifamily. I don't have the DP that I need, so what are some other creative ways other than Business Credit to fund the deal?
Commercial Real Estate Broker · New York, NY · Member since 2014 · 65 posts · 47 votes
10y
You don't use business credit for the downpayment, you borrow the money from partners and in exchange give them a portion of the deal. Real estate investing 101.
Hard money lenders usually lend 65-75% of the project cost, charge 12-14% and 2 points for origination. 12% fees is a huge red flag, the only you'll get from "Midwest Corporate Credit" is an ulcer from the stress of losing $7,200.
Raising $60,000 isn't too difficult, if you talk with friends and family and maybe a real estate attorney or two you should be able to raise it.