Posted by Ralf on April 24, 2005 at 11:17:27:
Kevin, Wether the banks will entertain your asking for a WLOC (working line of credit)depends on a few factors such as: how long you’ve been doing this, how stable has the cashflow been, how many deals you’ve done, your assets, etc. When you say that your income from wholesaling is “sporadic” just how frequently are you putting these deals together? 2-3 a month? or 1 every 2-3 months?
BUSINESS LINE OF CREDIT - ??? - Posted by Kevin
Posted by Kevin on April 22, 2005 at 11:38:52:
I am a full-time real estate investor.
I am looking to obtain a business line of credit with local banks in order to purhcase properties for cash.
Can anyone recommend the best way to do this?
Do I need a business plan?
What type of questions will the banker ask?
What does the banker look for? credit , exprience etc?
thanks
Re: BUSINESS LINE OF CREDIT - ??? - Posted by Rob
Posted by Rob on April 22, 2005 at 13:56:41:
Every bank is different! Some may only require a 1 page cash flow statement and others may want a full blown business plan. In either case the bank wants to know that you have a real business and not a hobby. You have been investing for a while and your properties cash flow you will be in good shape and at the least you will be able to establish a line based on the equity in your properties. After the bank is satisfied with your performance then they will give you an unsecured line. But, as I said before every bank is different. Meet with them first (commercial department) and ask what they are looking for. I had one bank entertain my request but then never heard from them again. I went to another bank and they did not hesitate to give me money. I later found out the first bank viewed REI as a speculative business. However, if my business (or one of my businesses) was a property management business they would have given me the line. To them the property management business was a viable business. Sometimes it just boils down to how you present yourself (business).
Re: BUSINESS LINE OF CREDIT - ??? - Posted by DaveD (WI)
Posted by DaveD (WI) on April 22, 2005 at 13:24:18:
Check the archives of the financial board… keywords are “working line of credit”
Re: BUSINESS LINE OF CREDIT - ??? - Posted by arlanj
Posted by arlanj on April 22, 2005 at 11:42:37:
I used free and clear rentals I own as collateral. I got a LOC for 75% of a drive by value.
I did present a 1 page plan, description of my business.
Simple as that.
No assets - Posted by Kevin
Posted by Kevin on April 22, 2005 at 16:13:08:
I own 1 rental home with 40k equity - But I have a HELOC setup for 27k on it already.
I have about 10k cash and a car as assets.
Only 1 rental property which cash flows $150/mo.
I currently have sporadic income from assigning contracts on houses ( between 1-4k at a time)
I do RE fulltime, so no employment income.
Based on that, do you guys think the Banks will even want to talk to me or am I wasting my time?