Thoughts on Using Bloc 12% Loan for Holding Costs

[Hyeseong Park]

Hey BiggerPockets community! I’d love to get your thoughts on a deal I’m working on and my financing strategy. Appreciate any advice or insights.

Here’s the breakdown:

Property Details:

Purchase price: $40,000

Rehab budget: $60,000 (lender holdback)

ARV: $175,000

Financing:

I’m getting a fix & flip loan with the following terms:

Loan amount: $100,000

Interest rate: 12%

Origination fee: $3,000

Processing fee: $450

Interest-only payments: $1,000/month

6-month term

Rehab holdback: $60,000

I also have access to a Bloc [Business line of credit] loan (secured against my rental property, NOT the flip property) with:

Loan amount: $35,000

Interest rate: 12%

Term: 3 years

Secured by my rental property

No other fees rather than 3% app fee.

My plan:

Use the fix & flip loan to cover the purchase + rehab, and use the Bloc loan strictly for holding costs like interest payments, insurance, utilities, taxes during the rehab/sale process. I’m planning to sell the property after rehab (resale exit).

Estimated profits after all costs (including loan fees, interest, selling costs) are around $40k–$50k.

Questions:

1. Do you see any downside to using the Bloc loan (12% secured against my rental) as a buffer for holding cost?

2. Any potential risks I’m overlooking?

3. Would you approach this financing differently?

Thanks so much for your insights – trying to make sure I’m not missing anything before I move forward.