Help I Need A Credit Line - Posted by David FL

Posted by TRandle on June 29, 2001 at 21:05:23:

How many bankers are there in your town? How many have you contacted? If you’re in a hurry, go knock on some doors. You’ll find someone willing to work with you.

For the longer term plan, I read where several folks here have had success by presenting business plans. I began one a while back, but it keeps getting put on the back burner. Anyway, hope that helps some…

Help I Need A Credit Line - Posted by David FL

Posted by David FL on June 29, 2001 at 18:47:19:

I posted this on the financing fourm an got little response so I thought I’d try this one.(Especially after reading Mr Porter’s post earlier)

This is my first year full time REI I have done 3 rehabs netting about 70k. I have 130k cash and a 50k credit line and a 740 beacon. To get were I want to be, I need about a 500k to work with. My banker just told me “sorry” all credit lines are based on income (other than real estate) and not the collatral and they have been burned by RE investors. I don’t feel I should have to pay hard money rates. What does everybody else do? Do I just have to pay the price? Are all big banks like this? Anyone in the know I would really like some help. I am closing on 2 homes in the next few weeks and using up a large chunk of my cash. So I need to plan ahead now. Thankyou in advance.
Thanks…David FL

Re: Help I Need A Credit Line - Posted by IB (NJ)

Posted by IB (NJ) on July 01, 2001 at 02:55:51:

Hi David:

I started working with a hard money lender (Gala Resources, LLC) whose terms seem to be reasonable: 16-18% int. only, 4 pts. up front, no (BS) origination fees. No exit fees or prepayment penalties.

I’m dong my first deal with them now (I’ve used my own cash on my previous deals). After a few deals, I will qualify for a $200k credit line costing 4pts. After about a year of working with that, I should qualify for $400k. In the meantime, I’m working on a business plan and will be attending that Ed Garcia workshop coming up in Aug. I’m trying to expand my options as far as financing rehabs and other REI deals are concerned. Email me if you need’s Gala Resources’s contact info.

Re: Help I Need A Credit Line - Posted by JT - IN

Posted by JT - IN on June 30, 2001 at 06:12:23:


What we all want, and what we end up accepting, are often two diffrent matters. It seems that you are off and running, with lots of things going your way. What you are asking for, as a first year full-time investor, may not be realistic, as your banker is clearly pointing out to you.

  1. Why not try to move the $ 50K LOC to $ 100K LOC.
  2. After making the purchase on the 2 homes in the next couple of weeks, then mortgage those two, to as close to FMV as possible.

You can surely get to where you want to be, but patience and smaller steps are going to be involved.

As your Banker said, they have been burned by RE investors before. It is very easy for new and experiecned investors, alike, to oversimplify this business, and get the wrong foot in front of the other, spelling financial disaster. A slower growth rate for your business is not all bad, and when you reach the point at which you desire, you will have a better appreciation for what it has taken to arrive there.


Re: Help I Need A Credit Line - Posted by Brian H

Posted by Brian H on June 29, 2001 at 21:18:48:


You need to talk to Ed Garcia. He has a workshop that shows you how to get a line of credit with your banker.

Bankers are analytical. Do not take this guy’s answer personally. You need to know what to say to him or her. You also need a BUSINESS PLAN to show the banker.

Call Ed at 909 944 0199. He will assist you and tell you more about his workshop.