Line of Credit?

[royemunson]

Is it possible to get a nice sized line of credit from a bank
or credit union to fund real estate deals - without securing
it to a home???

I've heard it's possible, but also heard there are certain steps/
things to do to secure a line of credit.

Joe

 

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[6.0_bull]

Joe

There are many variables when you are trying to secure a line of credit; I am assuming that you are looking for an unsecured credit line from one of the major banks...

Many things have changed in the past six months due to the sub-prime mortgage crises and the current economy being borderline to a recession currently, there for the lending institutions (Banks) have really tightened up on there lending criteria …

Its not hard to get but you will need the following in place generally speaking at most of the major lending institutions and also depends on what amount you are looking for in these times of crises in the financial markets ….and you defiantly don’t want to let them no that you need your credit line for real estate purchase, I think you might want to possibly look at a corporate credit line as well.

-The first thing that all the banks will be looking for will be your personal credit is a flawless credit history and generally speaking there looking for beacon scores right now of at least over 700+ with no late payments in the last two years.

-They generally want to see that you have been employed for minimum of 2 years as well
And usually some form of proof of employment for that term.or tax filing docs.

-If you have equity in your home and not in major debt with credit cards etc there are also looking for that

These are some of the basic criteria they are currently looking for, how ever you’re probably looking at smaller credit lines of $10-50k at most from one institution so my advice would be to try and establish corporate credit and get yourself higher amounts in the 100k range

 

[Edge]

I think it depends on what you consider to be "nice size". If you have decent personal credit and assets it's pretty simple to get 10-20k. This is personally guaranteed credit. If you are looking for larger lines, you are probably looking for corp credit. You generally need 2+ years seasoned corp for this. You will probably need to personally guarantee your smaller corp lines at first, the goal should be to wien newer, larger lines off of your name and into your corp name.

Donna Fox has a pretty good book "From Credit Repair to Credit Millionaire" that you might want to pick up.

 

[Bilgefisher]

Is it possible to get a nice sized line of credit from a bank
or credit union to fund real estate deals - without securing
it to a home???

I've heard it's possible, but also heard there are certain steps/
things to do to secure a line of credit.

Joe

I am actually working on this right now. I have applied for a 20k line of credit for my business which deals in RE. They asked me how much in sales I will do this year. 1million. Thats pretty accurate. I will sell 4-5 houses or so each worth ~200k. I was actually jobless at the time, so they figured my income to be 30k a year off the RE. They needed a credit score above 680. I had to give a personal guarantee, but did not have to attach it to anything. Hope that helps.

 

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[hakrjak]

The 2 years of being in business is pretty important, and in a lot of cases they'll ask you to produce tax returns showing your profits, etc... If you can't get the unsecured, getting secured lines is pretty easy as long as you've got good credit yourself. They rarely check your background beyond your Fico and what you tell them you make in income....

One thing I don't like about lines of credit is that you have to pay for them. Usually $100-200 per year "annual fee". I can get as much credit on plastic with no tax returns, based on my word of my gross household income without the annual fees, and they usually give you the convenience checks so you can use the money for whatever. Advanta is my fave -- I've currently got a $50k CC, which I can use like a line of credit there, and I earn reward points too -- Awesome.

Cheers,

- Hakrjak