Exploring a Line of Credit Opportunities
Real Estate Agent · Minster, OH · Member since 2019 · 35 posts · 19 votes
Exploring a Line of Credit Opportunities
Most Popular Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votesQuote from @Tyler Mcclean:
Absolutely you can open a line of credit against one or multiple of your investment properties but you quitclaim whichever property you choose into your personal name for purposes of obtaining the LOC. This can be closed in as little as 3-4 days with cash available 3 days after closing with no appraisal required. Very smart idea I refer this strategy to a lot of clients who flip to avoid closing costs on each individual deal they do.
commercial banks will not require the asset to be in your personal name they make the loan to the LLC with PG from the borrower or anyone who owns more than 20% of the LLC. Not need to do a title change.
19 Replies
- 2moJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
bank at your local community bank get to know your banker and have them set up a credit facility for you.. they will want you SFRs with no debt to be security.. that would be the least expensive route and help you build your relationship with your community bank..
community banks have been the difference maker in my career I would never bank anywhere else personally.. I like the personal service and being able to talk to my banker
- 2moTyler MccleanPro MemberInvestor · Nassau County, NY · Member since 2022 · 88 posts · 23 votes
Absolutely you can open a line of credit against one or multiple of your investment properties but you quitclaim whichever property you choose into your personal name for purposes of obtaining the LOC. This can be closed in as little as 3-4 days with cash available 3 days after closing with no appraisal required. Very smart idea I refer this strategy to a lot of clients who flip to avoid closing costs on each individual deal they do.
- 2moJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Tyler Mcclean:
Absolutely you can open a line of credit against one or multiple of your investment properties but you quitclaim whichever property you choose into your personal name for purposes of obtaining the LOC. This can be closed in as little as 3-4 days with cash available 3 days after closing with no appraisal required. Very smart idea I refer this strategy to a lot of clients who flip to avoid closing costs on each individual deal they do.
commercial banks will not require the asset to be in your personal name they make the loan to the LLC with PG from the borrower or anyone who owns more than 20% of the LLC. Not need to do a title change.
- Real Estate Agent · Minster, OH · Member since 2019 · 35 posts · 19 votes2mo
@Jay Hinrichs Thanks for the insight! I would agree, I would like the more personal relationship with a local banker. I've been in contact with my local bank, just looking to see if any other options are available and what other investors have done.
- 2moJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Caleb Fledderjohann:
@Jay Hinrichs Thanks for the insight! I would agree, I would like the more personal relationship with a local banker. I've been in contact with my local bank, just looking to see if any other options are available and what other investors have done.
U want a SMALL community bank any larger type regional or national lenders U will have difficulty with for sure.. small bank with maybe 1 to 3 branchs locally owned.
- 2moRemington LymanBusiness MemberReal Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
No bank will give you this
- 2moJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Remington Lyman:
No bank will give you this
R why do you think no small commercial bank will do this ?? if he has LLC assets that are free and clear seems to me the right banker if the exposure was very low would be happy to set that up as long as there was also a deposit relationship.. Now granted this may be very difficult but small community banks whose charter is to support small business make these type of arrangements all the time.. U cant go to a regional or national bank for sure. To small - 2moRemington LymanBusiness MemberReal Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
@Jay Hinrichs maybe I misunderstood his information. If he has paid off assets they will do that but I read it as he wants to put multiple properties in the LLC.
I thought he was trying to get a line of credit with no assets to pledge
- 2moShiloh LundahlPro MemberRental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes
Maybe some context would be helpful. Why don't you have any credit? You have paid off properties in an LLC which means that you probably have bank accounts. You rent an apartment. You likely have utilities in your name. Do you own any credit cards or are you doing the Dave Ramsey debit card only method? Have you ever financed a car or financed anything?
It is difficult to be an adult over the age of 25 that doesn't live at home with parents and that owns assets that also doesn't have some kind of credit score. I mean, it takes more effort to not have a credit score than it takes to have a credit score in that situation.
I'm not trying to criticize, I'm trying to understand and get more context to give you better feedback and ideas.
I like @Jay Hinrichs idea of finding a local bank to build a relationship with. I think this can be helpful. But don't consider at finding the right bank similar to finding the right spouse to marry. It is unlikely that one bank will be able to meet all of your real estate investing needs, and that it will be convient, and that it will have a great online banking platform and app where you can easily wire money from, etc. I work with multiple banks for different reasons and because each has their own strength.
This is what I would encourage you to do first. Go to ChatGPT and give it this prompt: "I live in ________ (fill in the city and state). I am looking for a local bank or credit union that works well with investors that is offering lines of credit. I own a couple of homes free and clear that are each worth between ______ and ______. I am not looking for mortgages on these properties but I would be willing to use them as collateral in order to get a line of credit. Give me names and the phone number of the individuals at the banks or credit unions that I can call and talk with that can help me get these lines of credit."
I used a similar prompt and ChatGPT returned with a list of 4-6 banks and credit unions. From there I started to reach out to them individually and I found a credit union that was near my office in Mesa, Arizona that ended up giving me $170,000 worth of business lines of credit between 2 different LLCs and it didn't need me to give a ton of information or tax returns (I did have to have decent credit though). I was very surprised at how easy it worked out. I have since referred 5 or 6 people there that have all gotten similar lines of credit.
Which ever bank or credit union you go to will likely pull your credit, which is fine, and they will let you know your score and what is showing up on your credit report and credit history. You may need to start playing the credit game in order to build your credit history and get a solid credit score. You've got to pay to play. People like Dave Ramsey are against the idea of "pay to play" because they don't think you will win. They think you are gambling and going against the house, and of course "the house always wins." For me, I'm willing to take out loans responsibly to show the world that I can pay them back in order to build a history so that people can look at that history and they can have evidence that I am someone who pays loans back so that they can feel comfortable to lend me money. I feel comfortable doing this because I know how to win at the credit game.
Good luck to you. Let us know how it goes.
- Real Estate Agent · Minster, OH · Member since 2019 · 35 posts · 19 votes2mo
@Shiloh Lundahl DM Sent. Thanks for taking your time to share your thoughts.
My undergrad degree was the only thing financed, which was paid off about 15-16 years ago. I live well below my means (no loans, credit cards, car loans, mortgage, etc...) and buy income producing assets at below market values when opportunities arise. I don't like processes with a lot of red tape and don't like monthly bills, being debt free conquers both (I'm not saying this is a superior path to financial freedom, just that it has worked for me).
I haven't looked into credit unions yet, which is a good idea. I have used AI to come up with some leverage ideas. I've been investing since I was 14 years old, so I understand leverage as a tool, I've just never utilized it before.
I wanted to see what other investors/lenders had to say and what ideas they've had success (or failures) with. And it's worked, I've had some insightful conversation with a handful of people already. Love the feedback!
- 2moJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Caleb Fledderjohann:
@Shiloh Lundahl DM Sent. Thanks for taking your time to share your thoughts.
My undergrad degree was the only thing financed, which was paid off about 15-16 years ago. I live well below my means (no loans, credit cards, car loans, mortgage, etc...) and buy income producing assets at below market values when opportunities arise. I don't like processes with a lot of red tape and don't like monthly bills, being debt free conquers both (I'm not saying this is a superior path to financial freedom, just that it has worked for me).
I haven't looked into credit unions yet, which is a good idea. I have used AI to come up with some leverage ideas. I've been investing since I was 14 years old, so I understand leverage as a tool, I've just never utilized it before.
I wanted to see what other investors/lenders had to say and what ideas they've had success (or failures) with. And it's worked, I've had some insightful conversation with a handful of people already. Love the feedback!
keep in mind with many small commercial banks that support local business they run by the 3 C's Collateral Capacity and Credit with credit score the last thing that is important. they want to know the collateral covers them and that the borrower can execute and does have finacing to execute.. credit score while it cant be horrible is the last consideration at least with the banks I use. although I have a decent score but back in the day when I had a ton of mortgages it was hard to get passed 680 ish.. never missed a payment or never had a 30 day late in my entire life.. I did have 90 dollar lien and I know that screwed up my score for a time.. I sold a boat and the guy i sold it to did not register in time and did not pay the use tax LOL. - 2moShiloh LundahlPro MemberRental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes
@Caleb Fledderjohann I got your message but I wanted to respond here for the benefit of other. The meaning of my post may have been viewed as me promoting looking into credit unions. And that was not the point of my post. Whether it is a bank or a credit union, it doesn't matter.
The real meaning of the post is "you have to pay to play."
You have lived below your means for a long time and have saved up and purchased properties in cash. That takes a lot of discipline and dedication. And that is awesome. You've been able to do it a lot on your own. But there are new levels of growth. And those levels have to do with looking outside of just yourself and your own independence and looking into interdependence.
I have no doubt that if you were stranded on an island that you would be able to build yourself a shelter and survive. But there is something to be said of having 2 or more people on that island that can combine their individual strengths to create more than the sum of what each person can create on their own. I think in the past, you may have looked at banks or maybe loans in a negative way when in fact they can be a great partner; and something even a really inexpensive partner.
I understand that the purpose of your post is specifically to change this and start considering using bank loans. I understand that. But the reason I am stating what I am stating is because, you have to show the banks that you are bankable. That your capacity to repay is high and that there is evidence that it is high. So you may need to get used to going through some of the red tape and the loan applications and the credit cards and whatever is necessary that you may not like, in order to "play their game" so that you can get the loans.
I hope I was able to clairify the focuse of my post.
Good luck to you.
- 2moJimmy LieuBusiness MemberReal Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votesGreat question and welcome! What you're describing is definitely doable, but based on your situation, I think the biggest hurdle isn't the LLC or the rentals—it's the lack of personal credit history. Even though you have free-and-clear rental properties, most lenders still want to see some sort of credit profile before extending an unsecured or revolving line of credit. If your rentals have significant equity, a commercial line of credit secured by those properties is probably your best long-term solution since you can draw funds as needed, pay them back after each flip, and keep the line open. Until you establish that, you may find hard money to be the easiest option because they're usually underwriting the deal more than your personal finances, although you'll generally pay higher rates and fees. I'd also start building your personal credit now since it will open up a lot more financing options down the road. Since you're in Ohio, I'd also compare local banks and credit unions that portfolio their own commercial loans—they can sometimes be much more flexible than national lenders if you have strong assets and a good relationship. Happy to connect and answer any questions you have!
Quote from @Caleb Fledderjohann:
Hi all...I'm looking for the most efficient scenario for a line of credit to use for fix and flips. I don't have a property in mind right now, but would like an LOC available when I find a property I'm interested in (basically an open LOC). Something that I only pay interest on the money that I use. I'm thinking between 100k-150k for the LOC. I would purchase the property, rehab, sell, and then pay the loan back while keep the line open for the next property. Is this doable?
Without going into too much detail, here's my financial situation...
- No credit history or score that I'm aware of
- I rent an apartment, W-2, no personal residence, zero debt, live in Ohio
- LLC with multiple single family rentals, zero debt, no mortgages
What would my best options be to handle this? Commercial HELOC, Portfolio LOC, Hard Money, Business Loan, etc...?
Interested to hear what lenders think and what other REI's have utilized with their own projects.
Any insight would be appreciated. Thanks!
Jimmy Lieu, Red 1 Realty4.9120 Reviews - 2moBryan MaddexBusiness MemberLender · Charlotte, NC · Member since 2015 · 160 posts · 76 votes
@Caleb Fledderjohann I worked in retail banking with small businesses for 17 years before I switched to the mortgage side 13 years ago, so I’ve seen how these conversations usually go on the bank side and mortgage side.
A bank granting a true open line of credit to someone with no credit history is extremely unlikely. Maybe a tiny little bank if you can essentially bribe them with significant deposits and a real relationship, because small banks need deposits. Outside of that, it’s just not something they do.
Of the thousands of investors I’ve worked with over 29 years, I can count on one hand the number who actually got a true blanket/portfolio line of credit against free-and-clear rentals. Those people were very seasoned, had strong credit, significant assets, and showed real income on their tax returns. It is not a common product.
A more realistic path for what you're trying to do is HELOCs on the individual properties. One HELOC per property. That still requires credit though. Right now you have none, so the first move is to start building some.
Get a couple of credit cards — even cash-secured ones if needed — and a small credit-builder loan from a local credit union. Use them lightly and pay them perfectly. After about 12 months of clean history you open up a lot more options, including investment-property HELOCs.
The other route is a credit partner. Sell a 25% or 50% interest in one or more of the free-and-clear properties to someone who already has strong credit. They may need to be on title for 3–6 months before some lenders will lean on their credit, but it can unlock the line of credit route much faster than waiting to build your own from zero.
Hard money can work for individual flips in the meantime, but it’s not the open, reusable line you’re describing. You’re basically looking at either building credit first or bringing in a partner who already has it.
Happy to dig into the specifics of the properties if you want to talk through which path makes the most sense. Post any questions that you have!
- 2moKerry Noble JrPro MemberInvestor · Indianapolis, IN · Member since 2018 · 2k+ posts · 1k+ votes
Quote from @Bryan Maddex:
@Caleb Fledderjohann I worked in retail banking with small businesses for 17 years before I switched to the mortgage side 13 years ago, so I’ve seen how these conversations usually go on the bank side and mortgage side.
A bank granting a true open line of credit to someone with no credit history is extremely unlikely. Maybe a tiny little bank if you can essentially bribe them with significant deposits and a real relationship, because small banks need deposits. Outside of that, it’s just not something they do.
Of the thousands of investors I’ve worked with over 29 years, I can count on one hand the number who actually got a true blanket/portfolio line of credit against free-and-clear rentals. Those people were very seasoned, had strong credit, significant assets, and showed real income on their tax returns. It is not a common product.
A more realistic path for what you're trying to do is HELOCs on the individual properties. One HELOC per property. That still requires credit though. Right now you have none, so the first move is to start building some.
Get a couple of credit cards — even cash-secured ones if needed — and a small credit-builder loan from a local credit union. Use them lightly and pay them perfectly. After about 12 months of clean history you open up a lot more options, including investment-property HELOCs.
The other route is a credit partner. Sell a 25% or 50% interest in one or more of the free-and-clear properties to someone who already has strong credit. They may need to be on title for 3–6 months before some lenders will lean on their credit, but it can unlock the line of credit route much faster than waiting to build your own from zero.
Hard money can work for individual flips in the meantime, but it’s not the open, reusable line you’re describing. You’re basically looking at either building credit first or bringing in a partner who already has it.
Happy to dig into the specifics of the properties if you want to talk through which path makes the most sense. Post any questions that you have!
I was going to suggest the credit partner route as well.
- 2moBryan MaddexBusiness MemberLender · Charlotte, NC · Member since 2015 · 160 posts · 76 votes
Quote from @Kerry Noble Jr:
Quote from @Bryan Maddex:
@Caleb Fledderjohann I worked in retail banking with small businesses for 17 years before I switched to the mortgage side 13 years ago, so I’ve seen how these conversations usually go on the bank side and mortgage side.
A bank granting a true open line of credit to someone with no credit history is extremely unlikely. Maybe a tiny little bank if you can essentially bribe them with significant deposits and a real relationship, because small banks need deposits. Outside of that, it’s just not something they do.
Of the thousands of investors I’ve worked with over 29 years, I can count on one hand the number who actually got a true blanket/portfolio line of credit against free-and-clear rentals. Those people were very seasoned, had strong credit, significant assets, and showed real income on their tax returns. It is not a common product.
A more realistic path for what you're trying to do is HELOCs on the individual properties. One HELOC per property. That still requires credit though. Right now you have none, so the first move is to start building some.
Get a couple of credit cards — even cash-secured ones if needed — and a small credit-builder loan from a local credit union. Use them lightly and pay them perfectly. After about 12 months of clean history you open up a lot more options, including investment-property HELOCs.
The other route is a credit partner. Sell a 25% or 50% interest in one or more of the free-and-clear properties to someone who already has strong credit. They may need to be on title for 3–6 months before some lenders will lean on their credit, but it can unlock the line of credit route much faster than waiting to build your own from zero.
Hard money can work for individual flips in the meantime, but it’s not the open, reusable line you’re describing. You’re basically looking at either building credit first or bringing in a partner who already has it.
Happy to dig into the specifics of the properties if you want to talk through which path makes the most sense. Post any questions that you have!
I was going to suggest the credit partner route as well.
Great minds.... ;)
- Real Estate Agent · Minster, OH · Member since 2019 · 35 posts · 19 votes2mo
I appreciate all of the feedback and direct messages stemming from this post. Very helpful and a lot of ideas!
- 2moVijay FriedmanBusiness MemberMiami, FL · Member since 2026 · 766 posts · 122 votes
Quote from @Caleb Fledderjohann:
Hi all...I'm looking for the most efficient scenario for a line of credit to use for fix and flips. I don't have a property in mind right now, but would like an LOC available when I find a property I'm interested in (basically an open LOC). Something that I only pay interest on the money that I use. I'm thinking between 100k-150k for the LOC. I would purchase the property, rehab, sell, and then pay the loan back while keep the line open for the next property. Is this doable?
Without going into too much detail, here's my financial situation...
- No credit history or score that I'm aware of
- I rent an apartment, W-2, no personal residence, zero debt, live in Ohio
- LLC with multiple single family rentals, zero debt, no mortgages
What would my best options be to handle this? Commercial HELOC, Portfolio LOC, Hard Money, Business Loan, etc...?
Interested to hear what lenders think and what other REI's have utilized with their own projects.
Any insight would be appreciated. Thanks!
@Caleb Fledderjohann
Having a reusable source of capital can definitely make acquisitions much smoother. One thing I'd compare is not just the interest rate, but also how quickly you can access funds, repayment flexibility, and whether the structure still works as you scale. Sometimes the "best" option depends on whether your priority is speed, leverage, or long-term cost.
Join the conversationCreate a free account to reply, vote on answers and follow this thread.