Lines of Credit

Access to revolving lines of credit can be a great way to fund your real estate investing purchases.

With access to enough credit, you can purchase "cheap" homes without applying for a mortgage. Simply draw down the funds from your credit line in order to fund the purchase and/or rehab costs.

A Home Equity Line of Credit (HELOC) or Unsecured Business Lines of Credit are the two main sources of credit lines that are primarily used by real estate investors.

While a HELOC can be set up at your local bank very easily, setting up Unsecured Business Lines of credit can be a little more tricky.

My partner and I purchased an inexpensive course to learn how to do this properly. You can learn more about it by clicking the link below:
http://www.geteasybusinesslinesofcredit.com/

Pros:

Home Equity Lines of Creidt (HELOCs)
Ease of Access - setting up HELOC lines has been a favorite lending medium of banks for the last few years.  Business is still rather competitive for HELOC customers such as yourself among lending instituions.  The "Credit Crunch" has taken  toll on the HELOC market as well, but not as much as other lending avenues.  Many banks have cut back large $300k - $400k available balances down significantly in an effort to  bring things in line with today’s values, but if you are not looking for major credit source like that and you have descent credit, tapping the equity in your home should still be an easy avenue.

Tax Benefits - many homeowners glean tax advantages from the interest paid out on HELOC loans.  This varies from person to person on each individual situation, and it is usually best to consult  a tax professional if this is a something you want to be able to count on.

Unsecured Business Lines of Credit

These types of credit lines do NOT report on your personal credit profile.  Thus their usage does not impact your personal credit score.  And because they do not show up on your personal credit profile, it is possible to assemble many of them at one time in order to build your own "Mini-Bank" for investing in real estate.

They can also be set up rather quickly.  Usually within a few weeks of establishing a new LLC or Corporate entity.

Again, to do this properly you may want to check out the course by Thomas Kish before charging forward in an unorganized search for funds.

Cons:

HELOCs
The single largest disadvantage to investing in real estate with HELOC funding is that you need to actually own a home with equity!

If you’ve got that base covered then the other major disadvantage is that a HELOC shows as a revolving line of credit on your personal credit profile.

Regardless of that fact that payments are made on time, the scoring models consider such activity "higher risk" for personal profiles (not so with business profiles) and can cause a point drop.

If you are the type that worship your credit score, checking it on a weekly basis, and feel that your score is a personal reflection on you yourself, then you may wish to use Unsecured Business Lines of Credit, Hard Money, or Private Money to fund you real estate deals.

Getting approved for a HELOC also require a credit appication, and if you have a poor score, getting approved for one may be tricky.

Unsecured Business Lines of Credit

Again, the only real disadvantage to using Unsecured Business Lines of Credit is that there is a proper way to go about applying for them.  If you take the proper steps, then getting access to Other-Peoples-Money (OPM) using this resource is a snap.  But if you do it the wrong way, you’ll find yourself a bit frustrated.

The good news is that you can lean how to handle the upfront process of getting you access to up to $250,000 in Business Credit, which does not report on your personal credit report, in only a matter of weeks.  Click here to find out how.

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