What credit sources do use?

6 Replies

What credit sources do you find most useful? Which do you find most problematic?

Big box credit, regular credit cards, "project" loans from banks, ULOCs, etc. 

I am looking at ways to supplement private money and the cash I have on hand to purchase and rehab flips. 

@Robin Williams I too am looking for credit sources.  Preferably credit Line.  I have a rental free and clear and cash flowing and the bank still turned me down. What is a ULOC 

@Robin Williams

I'm a big fan of HELOCs. 

Business lines of credits can be helpful as well.

Just be mindful of utilizing credit and having it effect your credit score and debt-to-income ratio

@Trevor Rutherford @Dave Van Horn - I have decent credit and a low debt-to-income (DTI) ratio. I did not want to rack up several hard inquiries at once so I reviewed my credit reports to see how many I already had, when they would fall off, then factored in what I knew was coming. I also used a DTI calculator to ensure I wouldn't over-borrow and wreck my credit score. I did these things so I could make an intelligent decision about how to approach this effort. Here's what I ended up doing:

1) decided to get another credit card with the highest limit they would give me. I got it from the same company that already had two other cards from so I could combine them into one. Ironically, that was easier than just getting them to raise the limits on what I already had. 

2) I used a peer-to-peer lending service to take out a $40k loan. The points and interest are a little high, but I just factored that into the plan and went for it. I used Lending Club, but there are plenty others out there. Prosper is another big one. 

I applied for both of those at the same time. Both were approved. Now I have access to about $80k between the two. I use this money to lock up contracts for flips or BRRRRs and get hard money loans. This allows me to work multiple properties at once and not have to pass up on good deals. 

ULOC = unsecured line of credit. It's a revolving account like a credit card, but is cheaper like a personal loan. I decided against this because I only found limits of $10-20k and only had 2 hard inquiries I was willing to sacrifice. 

@robin Williams was the 80k loan a line of credit or did you take out a loan?

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