Exposure line of Credit and Refi
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.
Most Popular Reply
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.