Credit partnering

4 Replies

I have a single family home that I purchased with Hard Money at 14%...I then maxed out 2 credit cards to rehab the unit and it quickly rented for $850/month...I currently cashflow $150/month after I pay my lender...I wish to refinance, but my credit took a hit when maxed out the cards...I was listening to Brandon on Biggerpockets and gave me the idea to take on a credit partner...I owe 33k and the house should appraise for 95k...how do I construct a deal to get this done?  Thanks in advance

Check out LimaOne's rental30 product.  They'll prob refi it for you if you want to hold it.  Pretty steep fees, though.

Private money would work if you know anyone, but if you are going to keep it, you want long term cheap money, so that doesnt really make much sense.

Aside from that I agree with Stanley.  Sell it, get big check.  Do another one.  Get big check, then buy some long term holds with 25% down and bank money.  a 14% rate will destroy your numbers on buy and hold.

btw,, its kinda funny how using your credit kills your score.  I'll use mine when I get tight on cash, then pay them off in a month, but my score plummets when I do.  Not like I'm gonna be making minimum pays on a lousy $20k, but they don't know that.

I agree, sell it and move to the next deal.

But for the sake of argument. If you really liked this property and the numbers were good. Go and look for either a credit or equity partner on the deal. Use a credit partner to refi and get a long term mortgage at reasonable rates. This gets you out of the HML and hopefully the credit card debt. Or get an equity partner to come in and purchase the debt from you. The 33k that you own the HML and your credit cards will get paid off, the house will then be free and clear. In both cases I would also recommend that you give your partner part of the deal, typically 50%, but that is up to you. In all cases, make sure that you have enough cash flow to cover all your expenses and still have something left over for yourself and your partner.