SBA loans - Do you have experience with it?
My partner and I employ the BRRRR strategy and our goal is do double our portfolio in the next 2 years. This translates to one deal a quarter. We have invested our own capital and have a track record of cash out 100% of our capital via forced appreciation. All our units cash flow at a healthy rate. We reinvest all our earnings.
In order to do one deal a quarter, we decided to take our first private money loan to fund a major rehab. However we will need more cash to keep up with our one deal a quarter plan.
Options we've considered, including SBA loans:
1. Add more of our own cash. We've exhausted this option and it's also not scalable.
2. Private money - using this but it's very expensive in my opion
3. Conventional loan - too slow, can't get a loan for uninhabitable buildings
4. SBA - we got an offer through Lendio but the costs are very high. The factor rate is something like 1.35 because our LLC doesn't have a credit history and we don't have massive cash reserves. We reinvest most our cash and income because we are trying to scale.
5. Raise more money from friends and family - it's definitely looking like most vible option
What do others think about this challenge? How have you approached it? Has anyone taken SBA loans out for real estate?