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Updated almost 5 years ago on . Most recent reply

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Exposure line of Credit and Refi

Lorenzo D Brooks
Posted

Bigger Pockets I have a lender who is working to get me approved for an exposure line of credit.  With the line of credit the there will be an appraisal on any property I purchase and a closing in 10 to 14 days.    My question is will I able to refi the property with a traditional lender to pay off the line of credit and thus repeat the process.   

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Lorenzo,you did not mention if property being purchased is an investment or owner occupied asset. Assuming it is a non-owner occupied/investment property you are using LOC to acquire. Usually these LOC are used in Fix N Flip or Fix N Rent strategies. Your max LOC is normally based on your Experience, Credit and Liquidity (usually up to 5 times liquidity) with a 12 month term and interest only pricing. If you intend to refinance using a conventional loan, your big hurdle may be seasoning (length of ownership before you can refinance). In the alternative/non-QM/Private Money sector seasoning is usually 90 -180 days, while conventional is 12 months. If you can overcome seasoning and income restrictions, you should be good.

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