All Forum Posts by: Dave Chow

Originally posted by @Owen Dashner:

Check with your local credit unions and smaller community banks. Most will do portfolio loans and are more open to credit lines on investment properties than larger banks. If you attend any Indy area REIA meetings, ask around with experienced landlords who they bank with to get some referrals.

This sounds to be a really good idea. Which bank did you suggest that can give loans under llc name without impacting personal credit ? If it’s a heloc, usually it needs put a lien on a property and with 10 years term. 
Originally posted by @Michael Ealy:

Originally posted by @Mike Koscielak:

I'm brand new to this forum and I'm amazed at how supportive this community is of one another. I'm about 100 podcasts in on both Bigger Pockets podcasts and the How to Money podcast combined, plowed my way through the Rich Dad Poor Dad and Set for Life books, but I haven't come across the information of what to do with money when saving up for a down payment on a rental property in the Milwaukee area. I have about $15k sitting idle in a savings account, which I've learned is not using it effectively. I need the money to stay liquid for when I reach that point of knowing how to spot a deal. Any suggestions are appreciated!

Mike,

One idea is putting up an LLC and then opening a secured business line of credit using your $15K as collateral. Your $15K can be put in a CD that earns 2% and then your business line of credit will charge you 5% when you use the money when you have a deal you like to make an offer on. You can just write a check from your secured business line.

The goal here is to build your LLC's business credit so that eventually, you can open an unsecured business line for $40K or more.

Your $15K will not really earn money doing it this way. However, the objective is to get an unsecured business line of credit so that you can get more money with low interest rate under your LLC's credit (so it does not even appear on your personal credit unless you default).

You can buy more houses with $55K total credit vs. only $15K. Also, if it takes you a while to find a deal, your money is not sitting in a checking account earning you 0. Your money is earning 2% and at the same time, building up credit for your LLC.

Originally posted by @Jake Fugman:

@Kevin Scanlan Jr.   You are taking the right steps so far.  Continue to network and more off market opportunities will naturally come your way if brokers/owners know that you are a serious buyer.  My general advice to those looking to house hack is to focus on the huge benefit of only having to put 5% down as an owner/occupant - even if this means having to take a slightly less attractive return than you first expected.  The returns you often hear/read about are often with investors have the advantage of using cash for purchase OR a large reserve to do rehab and force appreciation.