How to leverage cash into a larger credit line?

5 Replies

I have a question that I cant seem to find an answer to, so hoping someone here can point me the right direction. 

For years I have heard of investors raising capital, then leveraging it into a higher LOC

An example is an article I read last year about a rehabber in Jax FL

He raised $1m via crowdfunding (in a day, but not his first go around) and then leverages that into a $3m LOC

How is this done, who does this?

I understand how banks do this with the Fed, but am missing how an LLC can accomplish this.

I can post a link to the article if its allowed.

Not the first time Ive heard of this.

Anyone?

Finance of America offers a line of credit for flipping that is based on a multiplier (5x I believe) of retirement and savings. I just heard someone from there speak about it. There was a review of the project & points assessed each time you use line.

Are you sure he didn't just take the $1M and "leverage it" by using it as a down payment on a $3M property?

No, the article specifically mentions he leverages it into a $3m LOC

It was on Bloomberg:

Sifakis, the Florida flipper, typically gets a $3 million line of credit from an investment firm for about every $1 million he raises on RealtyShares, giving him added buying power.

Soooo, not sure how that works?

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