Does anyone have experience with Corevest Finace line of credit?

35 Replies

I have been approved for a large acquisition/renovation LOC from Corevest Finance. I am planning to use it to significantly expand my portfolio (mainly BRRRs along with some fix n flips) lin three different markets The rate is quite competitive 9.95% IO and 2% for each advance (per deal). The LOC is for 18 months and no draws alllwed in the last 6 months. It does have underwriting and closig fees of about 2-2.2k. After 18 mnths line can be renewed for another term for about 800-1000. I havent closed on it yet and wanted to run it by you all to get an opinion from some of the experts here on BP. Does anyone have experience with Corevest Finance for their LOC or with Corevest in general on any of their other offerings. I did some research on the company and they are definitely legit. They were Colony American Finance which was renamed and are or were a part of blackstone group I believe If any of you have any experience or information about the company it will bw great if you can share. Thanks in advance
Originally posted by @Vik P. :
I have been approved for a large acquisition/renovation LOC from Corevest Finance. I am planning to use it to significantly expand my portfolio (mainly BRRRs along with some fix n flips) lin three different markets

The rate is quite competitive 9.95% IO and 2% for each advance (per deal).

The LOC is for 18 months and no draws alllwed in the last 6 months.

It does have underwriting and closig fees of about 2-2.2k. After 18 mnths line can be renewed for another term for about 800-1000.

I havent closed on it yet and wanted to run it by you all to get an opinion from some of the experts here on BP.

Does anyone have experience with Corevest Finance for their LOC or with Corevest in general on any of their other offerings.

I did some research on the company and they are definitely legit. They were Colony American Finance which was renamed and are or were a part of blackstone group I believe

If any of you have any experience or information about the company it will bw great if you can share.

Thanks in advance

 Hi Vic, thanks for this post. I hope you don't mind me tagging along. It's interesting I couldn't find more posts from people on this company here on BP... makes me wonder why... I look forward to what you find out!

I have not used them personally.. however I know a few that have..

as you stated legit lender.. I do believe from what others said there underwriting can be quite stringent.

along with reporting ( now this might just be their buy and hold product.)

rates your talking about are about right for todays market 11 to 12% apr.. for private HML.. which is on the low side nation wide its higher back east.

Originally posted by @Erin Elam :
Originally posted by @Vik P.:
I have been approved for a large acquisition/renovation LOC from Corevest Finance. I am planning to use it to significantly expand my portfolio (mainly BRRRs along with some fix n flips) lin three different markets

The rate is quite competitive 9.95% IO and 2% for each advance (per deal).

The LOC is for 18 months and no draws alllwed in the last 6 months.

It does have underwriting and closig fees of about 2-2.2k. After 18 mnths line can be renewed for another term for about 800-1000.

I havent closed on it yet and wanted to run it by you all to get an opinion from some of the experts here on BP.

Does anyone have experience with Corevest Finance for their LOC or with Corevest in general on any of their other offerings.

I did some research on the company and they are definitely legit. They were Colony American Finance which was renamed and are or were a part of blackstone group I believe

If any of you have any experience or information about the company it will bw great if you can share.

Thanks in advance

 Hi Vic, thanks for this post. I hope you don't mind me tagging along. It's interesting I couldn't find more posts from people on this company here on BP... makes me wonder why... I look forward to what you find out!

Feel free to tag the post. 

I did my own search on BP and found a couple of threads here for ‘Colony American Finance’ which is the same company https://www.corevestfinance.com/about/

The two other posts that i saw had mostly favorable reviews for CAF as it was called here on one of the threads (colony amarican finance)

I am not sure why the name change etc but they are the same co with with the same CEO (Beth Obrien) and COO etc.

Originally posted by @Jay Hinrichs :

I have not used them personally.. however I know a few that have..

as you stated legit lender.. I do believe from what others said there underwriting can be quite stringent.

along with reporting ( now this might just be their buy and hold product.)

rates your talking about are about right for todays market 11 to 12% apr.. for private HML.. which is on the low side nation wide its higher back east.

Thanks Jay for your feedback. I appreciate it. I have a call with the underwriter this afternoon and should answer a few questions I have

Originally posted by @Marla B. :

@Vik P. what does it mean to say “no draws allowed in the first 6 months”?  

Its not the first 6 months but the last 6. The term for LOC is 18 months and the draws are allowed for the 1st one year but not in the last 6 months

Thanks

Originally posted by @Nicholas Duncan :

@Vik P. Any new news to report about the line of credit from CoreVest?

 I closed on the line about a week or so ago so its ready to go for OH,MO and TX. I havent drawn on it yet but will be doing that in the coming weeks and months for the next 1 yr and will provide an update on that experience. 

As for the underwriting and closing it was very thorough, transparent process and everything was according to what was disclosed at the beginning from the loan officer/originator so I am happy with the overall experience up until now

Will do. I am currently in contract for a property in KCMO (Clay count) and have put in a request for an advance. 

There are two types of advances with CoreVest or any HML for that matter. It was quite confusing for me originally with the fact that this is my 1st time using a HML. Hopefully the following description will help you guys/gals for your deals

1) Non-renovation advance - Lower of 80% LTC or 70% of the appraised value/as is value - Only requires a BPO (broker's price opinion) for valuation along with title work etc.

2) Renovation advance - Lower of 80% LTC or 65% ARV - CoreVest requires a full appraisal along with title work etc. I don't know if full appraisal is the norm or not as I haven't worked with other HML before CoreVest and would like to get a feedback on this from somebody who is more experienced and knowledgable.

I originally had made a request for a renovation advance i.e. option 2) above as I wanted to get some or all of the rehab funds for the project but unfortunately I had to switch to 1) as my closing is on 11/16 and the earliest they were able to get a full appraisal in (for ARV with my scope of work for rehab) was going to be 11/19. With the appraisal coming in on 11/19 the earliest I could have closed would have been 11/20 or 11/21 which was not going to work for me as my closing date is 11/16. The deal is through a wholesaler and he is leaving town so I couldn't push it.

I don't think this had anything to do with CoreVest as the appraisals are taking a long time in many of the US markets currently including KCMO where my property is.

The bottom line is that as of right now I will be doing my closing with option 1) and will use my own funds for the rehab on this deal which is alright.

I will update this thread with my experience for future deals when I do renovation advance.

Thanks


 

I used Sortis for a recent hard money transaction on a renovation, but we used our own money for the repairs.  They used a BPO.  They offered to wrap the renovation funds into the loan for what its worth.

Given that you have to make a request for a draw, and pay points for each advance, get 18 months for the line, and then pay for a renewal...well, how does that differ from just requesting a one-off pull for a renovation loan? and doing that again for the next?  What I am saying is that this doesn't sound like a line, but what do I know?  LOL  

So Part 1 is locking up a deal, renovating it, and getting it rented.  Part 2 is getting long term financing on the deal.  @Vik P. are you also using Corevest for place 30 year debt on your BRRR?

@Vik P. How has everything gone since you closed and requested your cash draw from Corevest? My partner and I had a call to review a very similar if not the same credit line you described above. I have a few additional questions for you in addition to your update on how things have progressed if you don't mind.

- Did you find CoreVest by yourself or did you use a middle man/consulting mortgage broker that found the potential credit line with CoreVest for you? 

- How many flips do you plan to do with this credit line per year? It seems like an expensive option if you are only flipping between 2-5 properties per year due to the following:

 ~ $2,500 origination fee

~ the 2% fee per draw off the line for each flip 

~ Title search and appraisal (Which CoreVest requires that they complete each deal/ draw off the line.

~ And the interest on top of that.

It seems like a very good option for people who are flipping a minimum of 10+ properties per year .

Thanks for the post and I look forward to your update and hearing your input on my additional questions.

Thanks, 

Josh 

@Kerry Baird - Any commercial HML LOC (bridge line) would require one to request a draw as far as I know.

Obviously if you're talking about a HELOC or LOC for an operating business or LOC for personal or if you're using 0% interest checks through a business/personal credit card providers that's totally different which is definitely an option where one won't have to make a request for a draw.

I have experience with all of the above and have used them all in the last 3 years. I did have a brick and mortar business up until May 2018 this year which I sold and last year I had looked into an LOC with US Bank for that entity. They (and many other banks) typically offer business LOC after 1 yr in business at around 30-35% of your top line revenue for that business.

Having said that I am not very happy about 'renovation' advance needing a full appraisal (~ $535) vs. a BPO (~ $180-$200) so at this point I am basically going to use CoreVest only for acquisition and manage the rehab expenses on my own for the next 1 yr. I have 3 personal LOCs and 2 business credit cards with 1 or 1.5 yrs @0% with fairly large balance so I am just going to use that for the most part and will do a full appraisal on a deal or two . I absolutely agree full appraisal was a bummer and something I didn't know for sure.

You mentioned about Sortis. I in fact have a very good relation and a point of contact with a guy @Sortis and he had offered basically the same terms a few months ago when I was looking into a deal i.e. 2points @9.95%. He did offer 14% with 0 points which I can't get with CoreVest as each draw by default is always @9.95% with 2 points.

All in all 1 or 2 Points (or even more) is pretty standard in practically every HML transaction. I don't have a whole lot of experience using HML but practically everyone I had talked to told me min 1-2 points with ~ 10% or more interest so CoreVest doing 9.95% with 2 points is very much in line with what others are offering except the BPO vs. full appraisal

As for part 2 - I am basically out of my 'golden tickets' i.e. 10 FNMA financings and will most likely go with CoreVest or another lender to do a portfolios loan when my portfolio value is over 667k+ (min portfolio loan with Corevest and many others is 500k and 5+ properties). I have talked to two including CoreVest to gather information but I am still in acquisition mode so may know more resources in the next 3-6 months when I'd be ready to do a refi

@Travis Watson - Thanks. I don't and I am not doing flips. I am planning to do BRRR just not on an individual property but it'll be over a portfolio of 5-7 properties which I plan to acquire, rehab, rented and do a portfolio loan on towards the end of my LOC

@Joshua Frahm - So far so good. I haven't made my first payment yet but that will be happening in the next few weeks.

1) I found out about CoreVest through a real estate podcast I was listening to (sorry can't remember which one). I did some online research and found FOA and CoreVest and had talked to both of them before I went with CoreVest

2) None. As you can see above my plan is to do a BRRR but just at the portfolio level instead of doing one at a time as I am a buy & hold real estate investor at least for the time being.

~ Origination fee was $1875

~ As mentioned earlier 2 points (or 2% fee) is I think pretty standard with int rate under 10%. Without it I will end up paying probably 14% or higher interest

- Title search is also pretty standard. A full appraisal on a 'renovation advance' was a shocker for me as well and that's one of the reasons why I probably won't renew the line when its time for that late 2019/2020 unless they offer a way around it for me :D

I think overall the LOC is a pretty good option imo. Can it be improved? sure

There aren't very many major vendors out there that offer a product like this other than CoreVest and FOA that cover basically all 50 states with LOC and portfolio loan. May be a few others that I don't know but not very many.

I will keep you all posted in the coming weeks and months. Thank you

@Vik P. Thanks for this post! I'm new to REI and have been scrutinizing my credit options and have been really considering CoreVest. They have a variety of LOCs and I was considering the LOC for acquisitions. They've sent me the application and the marketing brochure, but it does not make mention of the points you pointed out above. My concern/question is around the draw amount. I was told that LOCs begin at $1MM and around 15-18% liquidity is needed for the line amount you want. So if I put up $150k or $175k or more, I was expecting a large LOC to outright purchase properties cash. I was told that I could do this but I had to have a minimum of 2 properties for this LOC. You mention 80% and 70% amounts above.. so if all of my liquidity is tied up in this LOC, then how I would have any MORE money to put as a down payment? Maybe I'm not understanding or you have a different type of LOC. John at CoreVest said that I could buy properties outright (this was the intention of the line) then could convert to a long-term mortgage..

@Nicole Bordelon - First of all sorry I never responded to your message. I am not a frequent BPer and I logged in today after a while. My apologies. I have been trying to be more

I am not quite sure if I understand this part

"I was told that LOCs begin at $1MM and around 15-18% liquidity is needed for the line amount you want. So if I put up $150k or $175k or more, I was expecting a large LOC to outright purchase properties cash"

Basically when you apply for a LOC Corevest is going to look at your past experience with real estate deals (whether its rentals or fix n flips or whatever else) but for them to approve LOC they require one to have around 20% (they can probably do with 15-18% like you mentioned) of the LOC amount in liquidity (cash on hand, stock/ira/401(k) etc.). In your case if it's an LOC of a million you will need to show liquidity of ~ 200k or at least between 150k-180k.

I think a lot of people who are new to this (I was too when it came to borrowing hard/private money) think of LOC from a private lender (such as Corevest or FOA or others) as he/she having access to this large line that they can use properties outright (like a credit card or a HELOC)

That's not how these LOCs work. Yes you do get approved for a large line say 0.5 a million or more which can help you work on multiple deals at the same time but having said that when you find a deal that you want to acquire you still have to send a request for an 'advance' for them to issue those funds (off the LOC) to you.

For acquisition - depending on the #s for the property you'll be putting 20%-30% down payment with 70-80% from the LOC. 70%-80% borrowed funds is what you make IO payments on to Corevest

"I was told that I could do this but I had to have a minimum of 2 properties for this LOC" - I am not sure what you meant by this. I don't know if the above paragraph answered this already or not. If not please let me know and I will try to answer your question

As for the update regarding my own journey - As of today (since I closed on the LOC in Nov) I have acquired the following on my LOC

1) SFR - BRRR

2) A package of 3 townhomes - Not a BRRR really per se but I think I got a decent deal and I had other rental properties in the same area so it was a good addition to my portfolio. I bought the portfolio at 84% LTV so at 75% cash-out I'll be in the deal with around 9% down. Yes I will have a little higher int rate on a refi as I won't be doing FNMA financing for refi but in spite of that it still should help me quite a bit with my cash-on-cash return

3) A quad - I just closed on it last week. I wasn't really looking for MF as I have mainly been investing in C+/B and higher class singles. It was a property that was neglected and basically needed a full rehab. It won't be a BRRR but I came across the deal and I liked it because of it being in an A class neighborhood, separately metered including water and just overall area where the property is and demographics and the tenant pool that I will be attracting. Based on my pro-forma I will be in the deal with about 10-15% down at 75% cashout-refi. Considering all the factors I decided to go for it.

1) and 2) together above are currently being processed as a portfolio cash-out that I am looking into to get them off the LOC. I am looking at 30 yr amort 10/1 ARM for this

As for 3) when the rehab is ready I will be using my last 10th FNMA financing spot for it. I was kind of having that reserved for something special and I think 3) sort of met that criteria.

A couple of important points that I would like to mention for some of the new investors

1) Any LOCs from private lenders that are being offered are not really the same as cash from a CC balance transfer check or a HELOC or some other line that gives you access to cash on the spot. It does provide you some benefits which is the credit check and underwriting is done only once at the beginning and once the LOC is approved and closed on you won't have to send any documentation/paperwork etc. per deal. Yes the lender still do their DD and run an appraisal/BPO but the documentation per deal is only purchase agreement, rehab bid (if you're borrowing funds for rehab) and EOI.

You can definitely speed up your RE holding with an LOC

2) If you're close to 10/20 (if you're married and planning to use those) FNMA financing spots being used I will not recommend properties that are valued below 90-100k ARV. I have been talking to a ton of brokers and lenders and there are very few private lenders (if any) that will be ready to take on your refi if the loan amount is < 75k. Even with lenders who do blanket loans with a handful of properties and even if the total portfolio value is over 75k many of them require each property to have a loan amount of 75-100k

I will let you all know how my refinancing with 1) and 2) goes in the next 3-4 weeks. The rehab and cash-out refi on quad is a non issue for me as it'll be a FNMA refi plus the ARV would be around 250k on the quad so any lender would be ready to do the refi on that once the property is stabilized

Hope this post helps people who are in the same boat as I was 4-5 months ago or are looking into LOC/funding options for your RE investment journey

Originally posted by @Vik P. :

@Nicole Bordelon - First of all sorry I never responded to your message. I am not a frequent BPer and I logged in today after a while. My apologies. I have been trying to be more

I am not quite sure if I understand this part

"I was told that LOCs begin at $1MM and around 15-18% liquidity is needed for the line amount you want. So if I put up $150k or $175k or more, I was expecting a large LOC to outright purchase properties cash"

Basically when you apply for a LOC Corevest is going to look at your past experience with real estate deals (whether its rentals or fix n flips or whatever else) but for them to approve LOC they require one to have around 20% (they can probably do with 15-18% like you mentioned) of the LOC amount in liquidity (cash on hand, stock/ira/401(k) etc.). In your case if it's an LOC of a million you will need to show liquidity of ~ 200k or at least between 150k-180k.

I think a lot of people who are new to this (I was too when it came to borrowing hard/private money) think of LOC from a private lender (such as Corevest or FOA or others) as he/she having access to this large line that they can use properties outright (like a credit card or a HELOC)

That's not how these LOCs work. Yes you do get approved for a large line say 0.5 a million or more which can help you work on multiple deals at the same time but having said that when you find a deal that you want to acquire you still have to send a request for an 'advance' for them to issue those funds (off the LOC) to you.

For acquisition - depending on the #s for the property you'll be putting 20%-30% down payment with 70-80% from the LOC. 70%-80% borrowed funds is what you make IO payments on to Corevest

"I was told that I could do this but I had to have a minimum of 2 properties for this LOC" - I am not sure what you meant by this. I don't know if the above paragraph answered this already or not. If not please let me know and I will try to answer your question

As for the update regarding my own journey - As of today (since I closed on the LOC in Nov) I have acquired the following on my LOC

1) SFR - BRRR

2) A package of 3 townhomes - Not a BRRR really per se but I think I got a decent deal and I had other rental properties in the same area so it was a good addition to my portfolio. I bought the portfolio at 84% LTV so at 75% cash-out I'll be in the deal with around 9% down. Yes I will have a little higher int rate on a refi as I won't be doing FNMA financing for refi but in spite of that it still should help me quite a bit with my cash-on-cash return

3) A quad - I just closed on it last week. I wasn't really looking for MF as I have mainly been investing in C+/B and higher class singles. It was a property that was neglected and basically needed a full rehab. It won't be a BRRR but I came across the deal and I liked it because of it being in an A class neighborhood, separately metered including water and just overall area where the property is and demographics and the tenant pool that I will be attracting. Based on my pro-forma I will be in the deal with about 10-15% down at 75% cashout-refi. Considering all the factors I decided to go for it.

1) and 2) together above are currently being processed as a portfolio cash-out that I am looking into to get them off the LOC. I am looking at 30 yr amort 10/1 ARM for this

As for 3) when the rehab is ready I will be using my last 10th FNMA financing spot for it. I was kind of having that reserved for something special and I think 3) sort of met that criteria.

A couple of important points that I would like to mention for some of the new investors

1) Any LOCs from private lenders that are being offered are not really the same as cash from a CC balance transfer check or a HELOC or some other line that gives you access to cash on the spot. It does provide you some benefits which is the credit check and underwriting is done only once at the beginning and once the LOC is approved and closed on you won't have to send any documentation/paperwork etc. per deal. Yes the lender still do their DD and run an appraisal/BPO but the documentation per deal is only purchase agreement, rehab bid (if you're borrowing funds for rehab) and EOI.

You can definitely speed up your RE holding with an LOC

2) If you're close to 10/20 (if you're married and planning to use those) FNMA financing spots being used I will not recommend properties that are valued below 90-100k ARV. I have been talking to a ton of brokers and lenders and there are very few private lenders (if any) that will be ready to take on your refi if the loan amount is < 75k. Even with lenders who do blanket loans with a handful of properties and even if the total portfolio value is over 75k many of them require each property to have a loan amount of 75-100k

I will let you all know how my refinancing with 1) and 2) goes in the next 3-4 weeks. The rehab and cash-out refi on quad is a non issue for me as it'll be a FNMA refi plus the ARV would be around 250k on the quad so any lender would be ready to do the refi on that once the property is stabilized

Hope this post helps people who are in the same boat as I was 4-5 months ago or are looking into LOC/funding options for your RE investment journey

Great post/thread.  Thank you. 

I used Corevest end of last year to cash out 2 SFH. It was a 30 years fixed rate at 6.875%. Prepayment penalties for the first 3 years. Closing was smooth and quick. More importantly, they only underwrote the property. Not my entire portfolio.

Here're the fees that they charged me.

CoreVest Fees:

  1. Loan origination fee 1.00%
  2. Processing Fee $1,295.00
  3. Loan Doc Fee $295.00

Additional Costs:

  1. Appraisal and market rent analysis Fee average cost is $550.00
  2. CDA Review $75.00
  3. Flood Cert $15.00
  4. Credit Report $24.95, if foreign national, please discuss cost with your processor.
  5. Background Check report: U.S. citizen $100.00, if foreign national, please discuss cost with your processor.
  6. Tax Service (one time fee for yearly tax certification for taxes owed for proper payment and escrow requirements) $105.00
  7. Title Charges, recording fees and escrow: variable $ amount
  8. If borrowing in an LLC $350.00 for attorney review
  9. Condo Underwriting $125.00 (if asset is a **condominium)
Originally posted by @Chris T.:

I used Corevest end of last year to cash out 2 SFH. It was a 30 years fixed rate at 6.875%. Prepayment penalties for the first 3 years. Closing was smooth and quick. More importantly, they only underwrote the property. Not my entire portfolio.

Here're the fees that they charged me.

CoreVest Fees:

  1. Loan origination fee 1.00%
  2. Processing Fee $1,295.00
  3. Loan Doc Fee $295.00

Additional Costs:

  1. Appraisal and market rent analysis Fee average cost is $550.00
  2. CDA Review $75.00
  3. Flood Cert $15.00
  4. Credit Report $24.95, if foreign national, please discuss cost with your processor.
  5. Background Check report: U.S. citizen $100.00, if foreign national, please discuss cost with your processor.
  6. Tax Service (one time fee for yearly tax certification for taxes owed for proper payment and escrow requirements) $105.00
  7. Title Charges, recording fees and escrow: variable $ amount
  8. If borrowing in an LLC $350.00 for attorney review
  9. Condo Underwriting $125.00 (if asset is a **condominium)

 Just to clarify, I used their "single rental property loan" product. Not the finance line of credit that you had.

@Chris T. - Thanks for sharing your experience. 

I did inquire about doing 1) through Corevest and 2) through another provider but as 2) has 3 townhomes each priced between 65-70k I won't be able to finance those through Corevest single loan program. I got a quote for 1) through [email protected] 7% 30yr fixed

I preferably wanted to do both 1) and 2) together so I decided to go with another vendor for a portfolio loan with 1) and 2) combined. Let's see how that goes.

I have been really struggling with the decision if I should use CoreVest LOC or not. The underwriting fee per transaction, origination fee and exit fee are my concerns. In today's market the margins are so tight that I am really looking at the financing options carefully. I would only be using it until I refinance or sell other properties I paid cash for, so not sure their fees make sense for these transactions. However, timing in the business is everything as you all know!! I have come across some other commercial products that do not have upfront fees, but they do not have the name Corevest has-I am finding this a struggle to find the right options out there. I have heard from other investors that often they do not approve the deals-have others found this? What are some other lenders that you have used?

@Marylynn B. - Corevest was the first lender after I started looking for a lending partner when I was out of 10 FNMA spots. 1 primary + 8 singles. 

I wanted to keep the 10th one for a larger MF preferably 3/4 units). As I mentioned earlier I did buy a quad which is currently in rehab. I will be using my 10th spot when its ready

As for other lenders the only one I almost pulled the trigger on was Sortis.

As mentioned in my last post as part of refinance i talked to many brokers and direct lenders but have not used them yet so cant really speak for it.

Are you looking for a lender/broker to cashout refi your property/portfolio or are you looking for fix n flip type bridge financing?

@Vik P Thanks for sharing this indepth info regarding your experience with Corevest. Truly helpful insight for a Newbie like myself. 

Originally posted by @Vik P. :

@Nicole Bordelon - First of all sorry I never responded to your message. I am not a frequent BPer and I logged in today after a while. My apologies. I have been trying to be more

I am not quite sure if I understand this part

"I was told that LOCs begin at $1MM and around 15-18% liquidity is needed for the line amount you want. So if I put up $150k or $175k or more, I was expecting a large LOC to outright purchase properties cash"

Basically when you apply for a LOC Corevest is going to look at your past experience with real estate deals (whether its rentals or fix n flips or whatever else) but for them to approve LOC they require one to have around 20% (they can probably do with 15-18% like you mentioned) of the LOC amount in liquidity (cash on hand, stock/ira/401(k) etc.). In your case if it's an LOC of a million you will need to show liquidity of ~ 200k or at least between 150k-180k.

I think a lot of people who are new to this (I was too when it came to borrowing hard/private money) think of LOC from a private lender (such as Corevest or FOA or others) as he/she having access to this large line that they can use properties outright (like a credit card or a HELOC)

That's not how these LOCs work. Yes you do get approved for a large line say 0.5 a million or more which can help you work on multiple deals at the same time but having said that when you find a deal that you want to acquire you still have to send a request for an 'advance' for them to issue those funds (off the LOC) to you.

For acquisition - depending on the #s for the property you'll be putting 20%-30% down payment with 70-80% from the LOC. 70%-80% borrowed funds is what you make IO payments on to Corevest

"I was told that I could do this but I had to have a minimum of 2 properties for this LOC" - I am not sure what you meant by this. I don't know if the above paragraph answered this already or not. If not please let me know and I will try to answer your question

As for the update regarding my own journey - As of today (since I closed on the LOC in Nov) I have acquired the following on my LOC

1) SFR - BRRR

2) A package of 3 townhomes - Not a BRRR really per se but I think I got a decent deal and I had other rental properties in the same area so it was a good addition to my portfolio. I bought the portfolio at 84% LTV so at 75% cash-out I'll be in the deal with around 9% down. Yes I will have a little higher int rate on a refi as I won't be doing FNMA financing for refi but in spite of that it still should help me quite a bit with my cash-on-cash return

3) A quad - I just closed on it last week. I wasn't really looking for MF as I have mainly been investing in C+/B and higher class singles. It was a property that was neglected and basically needed a full rehab. It won't be a BRRR but I came across the deal and I liked it because of it being in an A class neighborhood, separately metered including water and just overall area where the property is and demographics and the tenant pool that I will be attracting. Based on my pro-forma I will be in the deal with about 10-15% down at 75% cashout-refi. Considering all the factors I decided to go for it.

1) and 2) together above are currently being processed as a portfolio cash-out that I am looking into to get them off the LOC. I am looking at 30 yr amort 10/1 ARM for this

As for 3) when the rehab is ready I will be using my last 10th FNMA financing spot for it. I was kind of having that reserved for something special and I think 3) sort of met that criteria.

A couple of important points that I would like to mention for some of the new investors

1) Any LOCs from private lenders that are being offered are not really the same as cash from a CC balance transfer check or a HELOC or some other line that gives you access to cash on the spot. It does provide you some benefits which is the credit check and underwriting is done only once at the beginning and once the LOC is approved and closed on you won't have to send any documentation/paperwork etc. per deal. Yes the lender still do their DD and run an appraisal/BPO but the documentation per deal is only purchase agreement, rehab bid (if you're borrowing funds for rehab) and EOI.

You can definitely speed up your RE holding with an LOC

2) If you're close to 10/20 (if you're married and planning to use those) FNMA financing spots being used I will not recommend properties that are valued below 90-100k ARV. I have been talking to a ton of brokers and lenders and there are very few private lenders (if any) that will be ready to take on your refi if the loan amount is < 75k. Even with lenders who do blanket loans with a handful of properties and even if the total portfolio value is over 75k many of them require each property to have a loan amount of 75-100k

I will let you all know how my refinancing with 1) and 2) goes in the next 3-4 weeks. The rehab and cash-out refi on quad is a non issue for me as it'll be a FNMA refi plus the ARV would be around 250k on the quad so any lender would be ready to do the refi on that once the property is stabilized

Hope this post helps people who are in the same boat as I was 4-5 months ago or are looking into LOC/funding options for your RE investment journey

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