Rental Property Investor · Ventura, CA · Member since 2018 · 28 posts · 2 votes
Good morning/afternoon BP family!
So I’ve gone to more than a dozen banks within the past couple weeks, figuring out what banks are the best for financing my RE needs. I found out that some of the local banks offer unsecured lines of credit for $30k-$250k. I was thinking about opening up accounts with about 4 of these banks and receive the LOCs. Of course I’d only use the capital I’ll need to acquire properties. But, if the cash flow covers the high interest rates, would this be a good idea? I also understand that these rates are normally variable but, these banks offer a refinance offer for fixed rates after 6mo-1yr.
Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
7y
FYI: Once you open a $200k unsecured line of credit with Bank A, don't assume Bank B's offer will still be standing when that hits their updated credit report. And to make things more fun, no one is going to be transparent about this. Each one will be asking you to open a line of credit with them first, and no one will tell you if it's because of this, or if it's purely a sales technique.
Rental Property Investor · Newport Beach, CA · Member since 2017 · 218 posts · 138 votes
7y
@Chris Mason what minimum payment amount would future lenders apply to a DTI calculation if you had a $200k unsecured line of credit open with a bank? Similar to a HELOC, I assume?
Property Manager · Baton Rouge, LA · Member since 2014 · 2k+ posts · 195 votes
7y
Your personal DTI will prevent you from getting future funding even if you could get the 1st $200k. I would start doing business as a business if I were you. set up a LLC or other business entity and borrow funds under the business day. This will save you good credit and personal line while establishing business lines