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.
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?
This forum from 2 years ago seems to be discussing the same topic: https://www.biggerpockets.com/forums/49/topics/272...
Looks like it's local banks allowing you to leverage cash if you meet certain net worth hurdles. Sounds pretty silly to me if I were a bank credit officer..
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