Rehabbing Multifamily where can I borrow funds.

[Account Closed]

Hello again BP, I just bought a Quadraplex and I have some funds to renovate but I need some more to finish all at one time. Family and friends is not an option for me. Which company or bank do you use to get funds to renovate a property that I intend to hold? Is there any such thing out there?

[John Hickey]

@Tom S. I’ve done some rehabs on CC. It’s def an option. I’ve done it and made a lot of money a few times. But I did learn something that should be pretty obvious.....my middle name is oblivious.

So here it is. My laymen’s experience. I’m not credit expert so hopefully someone sees Experian, trans union etc and checks in here with helpful info.

Credit rating agencies use some sort of calcs to rate your credit. When you get over 30/50% on an individual card or across your whole Revolving credit profile that will have an affect on your credit.

Applying for several cards at once will also have an affect.

So if your planning to use cc to fund Reno’s plan way ahead, get the cards. Use them to pay for every expense you can. 

keep the cards below 30% as long as you can...and be prepared for the cc companies to slash your limits when they see what you going over 50% and not paying it off like you had been   

If you get your limits lowered don’t plan on taking any new credit for a while.

So if I was doing it again I would use the cards monthly, pay them down with cash month after month....they see that they’ll raise your limits.

And when I know ill need them use the max amount i plan to use in the same month.

then finish out with the rest of my cash. Timing wise i would want to take advantage of the teaser rates and pay then down when i refi/sell.

Just keep in mind if you refi those high cc balances will be looked at and it might be something that will raise your rate on your mortgage....it could even be the cause of you not getting approved   

I’ve done it. Don’t recommend it but everyone makes their decisions. If your using this strategy to flip it’s risky   If your using it for buy and hold its more risky if the CC are in your personal name. So if that’s your thing make sure you have reserves to cover expenses plus all the cc

Once you’ve been around for a while try getting a business loan based on revenues

They won’t show on your credit so it takes some pressure of your score